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(Alliance News) - Tyman PLC on Wednesday said trading was significantly ahead of expectations in the third quarter thanks to improving order intake as well as customer restocking.
Shares in Tyman were up 15% at 276.50 pence in London in midday trading.
The London-based windows and doors supplier's revenue fell 10% to GBP416.4 million in the nine months ended September 30 compared to the year before. However, third quarter revenue was flat year-on-year and has risen 3% on a like-for-like basis.
"Trading has significantly exceeded our expectations in Q3. Whilst there has been an element of pent-up demand release and customer restocking, order intake continues to improve in all three divisions, indicating the strength of underlying demand," said Tyman.
North America order intake was "particularly strong" thanks to recovery in single family housing starts as well as RMI activity. Tyman's exposure to single family starts is propositionally higher, meaning it has benefitted from "a recent change in mix from multi-family starts to single-family starts, driven by 'urban flight'".
The UK market recovered strongly, with increasing numbers of housing transactions combined with "very high mortgage approval levels", partly due to low borrowing rates and the temporary stamp duty cut, the company explained. People have also been seeking more space during lockdown.
As at September 30, Tyman's net debt to earnings before interest, tax, depreciation, and amortisation ratio on a covenant basis had improved to 1.4 times from 1.8 times at the end of June.
Should momentum be maintained into the fourth quarter and on into 2021, Tyman will consider "the appropriateness of a modest final dividend for 2020."
Tyman is now expecting second-half revenue to be just slightly behind the second half of 2019, much better than its original expectations. Leverage at the end of December is forecast to be below 1.4 times adjusted Ebitda.
Chief Executive Jo Hallas said: "The strength of demand recovery in Q3 is very encouraging, and we are working closely with our customers to support them through this exceptional period. While the outlook continues to be uncertain, the strength of structural industry growth drivers is clearly evident, particularly in the US. Our strategic initiatives are having the desired impact in strengthening our base and will position the business well for future growth, building on our portfolio of differentiated products, market-leading brands and deep customer relationships."
By Anna Farley; annafarley@alliancenews.com
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