Last checked at 17 Nov 2020 07:00
17 November 2020
EUROCELL PLC
("Eurocell" or the "Group")
Trading Update - Improved Outlook
Eurocell plc, the market leading, vertically integrated UK manufacturer, recycler and distributor of innovative window, door and roofline PVC products, provides the following update for the 10 months to 31 October 2020.
Trading and Operational Performance
We are pleased to report that the strong sales performance for July and August announced with our Half Year results has continued.
Sales growth | H1 | July / Aug | Sept / Oct | H2to 31 Oct | YTDto 31 Oct |
Reported |
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|
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|
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Total Group | -31% | 11% | 15% | 13% | -12% |
Like-for-like(1) |
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|
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Total Group | -4% | 12% | 14% | 13% | 5% |
Profiles Division | -14% | 2% | 9% | 6% | -4% |
Building Plastics Division | 3% | 20% | 18% | 19% | 12% |
(1) Like-for-like excludes acquisitions and new branches opened in 2019/20, and is calculated by comparing average sales per trading day in 2020 (i.e. 177 days to 31 October, excluding days closed due to lockdown) with average sales per trading day in 2019 (212 days to 31 October).
The repair, maintenance and improvement (RMI) market has been stronger than we anticipated when announcing our Half Year results in September, with housing market activity also now increasing, supported by high levels of mortgage approvals. Furthermore, we believe we are also taking market share. As a result, H2 like-for-like(1) sales to 31 October are up 13% on 2019.
· Profiles up 6% includes good contributions from trade fabricators, who are substantially focused on the RMI market. New build started the second half slowly, but run rates are also now improving
· Building Plastics up 19% includes a strong performance across our range of own-manufactured products and traded goods, as well as an excellent start for our new range of outdoor living products
Whilst strong demand in our markets has put supply chains under pressure, we have secured the raw materials we require to close out the year. We are seeing increased prices for PVC resin, albeit partially mitigated by our market-leading recycling plants, which are performing well. Gross margins and operating efficiencies in H2 have been good.
Fit-out of our new state-of-the-art warehouse remains on track and we continue to target being operational early in 2021. As well as being key to increasing capacity, the new warehouse will deliver improved operational efficiencies in 2021 and beyond.
Outlook
We have so far seen no discernible impact from the recent tightening of COVID-related restrictions, including the second national lockdown imposed from 5 November. Our manufacturing plants, branch network, distribution and recycling operations all remain open, in line with UK Government guidance. Subject to no significant further adverse impacts from COVID, we now expect underlying profit before tax for the full year to be ahead of current expectations.
We expect the improved outlook to drive lower net debt. We have a strong balance sheet, good liquidity and significant headroom on our bank facility, leaving us well-placed to capitalise on opportunities as markets develop. It remains our intention to return to paying dividends in 2021.
Finally, we have maintained a good health and safety performance, with safe working practices for COVID-19 operating well across the business.
Notice of Results
We expect to publish our results for the year ending 31 December 2020 on 11 March 2021.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
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Enquiries:
Eurocell plc
Mark Kelly, Chief Executive Officer
+44 (0) 1773 842 105
Michael Scott, Chief Financial Officer
+44 (0) 1773 842 140
Teneo
Ben Foster
+44 (0) 777 624 0806
Camilla Cunningham
+44 (0) 7464 982 426