(Alliance News) - Polypipe Group PLC on Tuesday said it has bought Nu-Heat Holdings Ltd for GBP27 million as it also said underlying profit for 2020 will be ahead of previous guidance.
The FTSE 250-listed plastic piping systems manufacturer said the acquisition of the Honiton, Devon-based supplier of sustainable underfloor heating solutions, air and ground source heat pumps will expand its proposition of climate management solutions and help it grow in the area of low-carbon heating.
"This acquisition will enable us to further develop our underfloor heating capabilities, and to develop new and exciting ways to integrate underfloor heating, heat pumps, and air-based climate management systems," said Polypipe Chief Executive Martin Payne.
For 2020, Nu-Heat posted earnings before interest, tax, depreciation and amortisation of GBP3.1 million on revenue of GBP16.0 million.
Polypipe said the purchase is being funded using existing debt facilities, adding the acquisition is expected to be earnings-accretive in the first full year of ownership, and to provide returns in excess of the group's cost of capital.
Separately, the Doncaster-based company stated trading continued to recover through to the end of December, with underlying operating profit for 2020 slightly ahead of the previous guidance of around GBP40 million. Underlying operating profit for 2019 was GBP78.1 million.
Polypipe highlighted that positive momentum has continued into 2021, with no material negative impact from the third lockdown in the UK.
Net debt at December 31 was GBP30 million.
Full year results will be published on March 16.
Shares in Polypipe were trading 2.0% higher at 524.00 pence each on Tuesday morning in London.
By Ife Taiwo; ifetaiwo@alliancenews.com
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