18th Aug 2014 08:04
LONDON (Alliance News) - Polypipe Group PLC Monday said it swung to a loss in the first half, due to costs related to its initial public offering and refinancing senior secured notes.
The company, which makes piping systems for the residential, commercial, civil and infrastructure sectors, posted a pretax loss of GBP4.6 million for the six months ended June 30, from a GBP9.7 million profit a year earlier.
Exceptional charges of GBP12.4 million were incurred in the period in relation to Polypipe's April IPO. A further GBP8.6 million of exceptional finance costs were incurred in the period in relation to refinancing the senior secured notes.
Pretax profit before exceptional items rose 66% to GBP16.4 million from GBP9.9 million a year earlier. Revenue rose 11% to GBP168.2 million from GBP151.8 million.
Despite the loss, the company declared a maiden dividend of 1.5 pence per share.
Polypipe said it saw strong demand for residential piping systems from UK housebuilders, increasingly from smaller developers and projects outside of London and the South East. It said the new build sector represented approximately 38% of residential revenue in the period with the more stable repair, maintenance and improvement sector representing the balance of 62%.
Residential piping systems revenue rose 11% to GBP86.8 million from GBP78.1 million a year earlier.
The company said sales to the commercial and infrastructure sector in the UK, which represented around 32% of group revenue, rose 19% to GBP56.4 million from GBP47.3 million a year earlier.
"We have experienced good demand from road and rail projects and the development of high rise, multi-occupancy buildings has continued in London, and more recently we have seen an increase in activity in some other major cities," Polypipe said.
In addition, the company said sales to the commercial and infrastructure sector in Continental Europe, predominantly in France, which represented approximately 18% of group revenue, was 1.3% ahead in local currency terms but down 2.9% as reported due to the adverse currency translation impact.
"I am delighted with the progress that we have made following the group's successful IPO earlier this year, and these results show that we are delivering on the strategy we set out at the time," Chief Executive David Hall said in a statement.
"The group's healthy growth in sales and underlying profits demonstrates the confidence returning to our sector and a deserved reward for operational improvements and investment we made when market conditions were much tougher," Hall said.
Hall said Polypipe is "well placed" to capitalise on the future growth opportunities and confident that the group will deliver results for the full year in line with those outlined at the time of its initial public offering in April.
The stock was quoted up 3.5% at 244.23 pence Monday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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