Doncaster’s deflation-hit Polypipe Group still on target for full year expectations

Polypipe Group, a Doncaster-based manufacturer of plastic piping systems for the residential, commercial, civils and infrastructure sectors, released an update on trading for the ten months ended 31 October 2015, confirming its full year expectations in terms of underlying operating profit.

The Group’s revenue for this ten month period was £299.3m (2014: £282.6m) an increase of 5.9% over the same period in the prior year.

In addition, UK operations generated like-for-like revenue growth of 2.9% - a figure that has been impacted by polymer cost deflation passed onto customers and by weaker than expected demand from the residential repair, maintenance and improvement segment.

These trends were prevalent in the four month trading period ended 31 October 2015 when like-for-like revenue growth was 2.3%.

The Group’s underlying operating profit, including the contributions from the Surestop and Nuaire businesses acquired this year, remains on plan and the Group expects its full year underlying operating profit to be in line with market expectations as a result of margin improvement from lower polymer and distribution costs and continuing efficiency gains.

David Hall, chief executive, commented: “In a period when there were two fewer working days our reported revenue growth has been distorted by the pass through of lower polymer costs and also the weaker than expected revenue from the RMI segment, I am pleased to be able to report that, as a result of margin improvements, we are trading in line with plan after ten months and expect our full year underlying operating profits to meet market expectations.

“The Nuaire ventilation business which we acquired in August this year is trading in line with our expectations and I am pleased with the way this recently acquired business has settled into the Group.”