LONDON (Alliance News) - Eurocell PLC on Tuesday said its pretax profit fell in the first half of 2015 due to exceptional costs it booked in the period, though its underlying profit was higher on the back of an improved gross margin which offset a decline in revenue.
The company, which manufactures and distributes window, door and roofline PVC products, said its pretax profit in the first half to the end of June fell to GBP6.3 million from GBP7.3 million a year earlier, driven by a GBP3.3 million exceptional cost the company booked in the half related to its March initial public offering. Stripping out those one-off costs, however, the company said its pretax profit was up to GBP9.6 million from GBP7.1 million.
Eurocell's profit was pushed higher by an improvement in its gross margin in the first half, up to 52.2% from 48.0% a year earlier, as revenue declined to GBP82.5 million from GBP83.1 million. Revenue from its profiles division was down to GBP35.2 million from GBP35.4 million, while building plastics division revenue fell to GBP47.4 million from GBP47.7 million. The margin improvement came thanks to better branch sales of higher margin products.
On the back of the underlying profit improvement, the group said it will pay its maiden interim dividend of 2.7 pence per share.
"Eurocell has reported a strong set of maiden results, against a challenging market backdrop, which have seen an acceleration of our underlying profit growth since IPO," said Bob Lawson, Eurocell's chairman.
Lawson said the market is set to return to growth in the second half, following a slowdown prior to the UK's General Election in May. "With our additional branches and reinforced management structure we are in a good position to optimise this opportunity. We are confident that our current strategy will deliver growth and continued improvement in profits in line with management expectations for the full year," he added.
Shares in Eurocell were untraded early Tuesday, having last traded at 205.00 pence.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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Eurocell (ECEL)