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15 May 2025 07:00
15 May 2025
EUROCELL PLC
("Eurocell" the "Group" or the "Company")
Trading Update
Eurocell plc, the market leading, vertically integrated UK manufacturer, distributor and recycler of innovative window, door and roofline products, provides the following update for the first four months of 2025, in advance of the Annual General Meeting ("AGM") later today.
Summary
Trading conditions in our key markets have been mixed. There are some signs of an improving picture in new build housing, but we are still experiencing lower than expected demand in our core RMI market. We therefore continue to focus on further cost reduction and operational improvements to drive more efficiencies and mitigate against the impact of delayed market recovery.
We are making good progress with the execution of our growth strategy and are pleased to see this coming through in the sales performance of our key initiatives.
As we consider the outlook for the remainder of the year, recognising the potential adverse impact of macroeconomic conditions on volumes, particularly RMI, we now expect adjusted profit before tax for the year in the core business to show nominal improvement over 2024, before any impact from the Alunet acquisition. We expect Alunet to deliver a net increase in the Group's adjusted profits in line with our plans, reflecting strong market share gains already achieved this year.
Our balance sheet is strong and the actions we have taken, including those on costs and cash flow, position us well to benefit when our end markets fully recover.
Trading Performance
Excluding Alunet, Group sales for the four months to 30 April 2025 were level(1) with 2024, with volume down 1%. Including Alunet, Group sales were up 8%(1). Comparisons by division were:
Sales to 30 April 2025 | vs 2024(1) |
Profiles Division | +1% |
Branch Network Division | Level |
Group, excluding Alunet | Level |
Total Group, including Alunet | +8% |
(1) On a trading day adjusted basis
Profiles - sales up 1%, with volume down 2%, reflecting reduced RMI activity through our trade fabricators, partially offset by some modest improvement in the new build housing market.
Branch Network - sales level with 2024, with volume down 1%, reflecting:
• | Underlying Branch Network sales to the RMI market down 4% |
• | Offset by the benefits of progress with our strategic initiatives for window and door sales (up 7%), garden rooms (up 29%) and e-commerce activity (up 51%), with the contribution to date from new branches not yet material |
We opened two new branches at the end of last year, plus a further four so far in 2025, with three more to come in the first half. Together with three relocations already completed this year, this creates a short-term drag, but enables longer-term profit improvement.
Alunet - market share gains driving strong sales growth in line with our plans:
• | Alunet Systems secured new business with nine Eurocell fabricators, successfully launched the new Aluna+ aluminium window system in April, with the new Iconiq aluminium roof lantern launch planned for June. As a result, we anticipate that sales will continue to build in H2 |
• | Comp Door has continued to acquire new installers. The new Sleekskin door has been well received by the trade and we expect the business to benefit from cross-selling opportunities and supply chain synergies with Vista |
Input cost prices have remained stable, including electricity (where we operate a rolling 12-month forward hedging policy for the majority of our requirements), recycling feedstock, and PVC resin.
We continue to see inflation elsewhere, particularly labour costs, which include the increases to employers' National Insurance and the National Living Wage from April 2025.
In order to offset this inflation, we have implemented selling price increases and taken other management actions, including cost reductions. The branch network restructuring announced with our preliminary results in March is now complete, generating annualised savings of c.£2 million. In addition, we have now identified further overhead cost reductions to be realised in 2025 of c.£2 million.
Capital Allocation
In line with our strategy, significant investments in the next 12 months include delivering the project to modernise our IT infrastructure, which remains on track, and further new branch openings.
We are committed to driving shareholder returns through a combination of a progressive ordinary dividend and supplementary distributions (currently via share buybacks) where appropriate, whilst always seeking to maintain a strong financial position.
Good cash flow management underpinned the successful delivery of a £15 million share buyback programme substantially in 2024. The new £5 million share buyback announced on 20 March 2025 has progressed well. As of 14 May 2025, we had purchased approximately 0.9 million ordinary shares at a cash cost of £1.4 million and we expect to complete this buyback during the second half.
This announcement contains inside information for the purpose of the assimilated Market Abuse Regulation (EU) 596/2014 as it forms part of the law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018, as amended.
Enquiries:
Eurocell plc
Darren Waters, Chief Executive Officer +44 (0) 1773 842 105
Michael Scott, Chief Financial Officer +44 (0) 1773 842 140
Teneo
Nick de Bunsen +44 (0) 7825 575 258
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