Half year report
Financial Highlights
· UK revenue 0.9% ahead. Growth excluding the £8m estimated impact of adverse weather in February and March approximately 5%
· Basic earnings per share from continuing operations up 0.8% at 12.4 pence
· Cash generated from operations 5.7% higher at £22.3m
· Net debt of £145.8m at 30 June 2018 is 1.7 times LTM EBITDA2 compared to 2.0 times in the prior year, and on track to meet management expectations for the year
· Interim dividend increased 2.8% to 3.7 pence per share
Operational Highlights
· UK Residential Systems achieved good organic growth of 5.9%
· Commercial and Infrastructure Systems revenue down 6.6%. Impacted by previously disclosed project delays in road and other commercial projects affecting short-term performance
· Successfully completed disposal of low-margin French business for €16.5m on cash-free, debt-free, normalised working capital basis
· Good progress on innovative manufacturing and sustainability with increased use of recycled material
· The new £5.0m large diameter continuous corrugator at our Horncastle plant is performing well with revenue generation in line with plan
· Dubai factory exit and alternative manufacturing strategy going to plan - first product manufactured by a sub-contracted partner using Polypipe tooling delivered in July
Outlook
· UK market outlook for the second half remains mixed
· Fundamentals in Residential Systems segment continue to be strong, driven by the new housebuild sector, UK RMI likely to remain challenging
· Signs of improvement in our Commercial and Infrastructure Systems segment towards the end of the period and start of H2 with road programmes beginning to increase in activity. Commercial activity improving as the impact of Carillion-related delays reduces and improved project awards in 2017 work through
· Trading has started well in the second half, and the Board is confident that the Group will deliver results in line with management expectations for the year ending 31 December 2018