Alumasc revenue, profits rise in first half

Alumasc reported a 6.4% rise in group revenues in its interim results on Tuesday, to £47.8m, driven by a robust performance in the water management sector, where revenues surged 12% to £22m.

The AIM-traded firm said building envelope remained resilient, recording revenues of £18.7m, slightly higher than the £18.3m it recorded in the first half of the 2023 financial year.

Housebuilding products also showed resilience, with revenues slightly increasing to £7.1m, while overseas sales experienced a strong recovery, reaching £5.7m, more than double the prior period.

The underlying group operating margin increased to 14.1% from 13.4% a year earlier, with notable improvements in water management at 16%, housebuilding products at 24.5%, and a slight dip in building envelope to 12.8%.

Underlying profit before tax grew 12.4% to £6.3m, which the board attributed to increased volumes and effective price and cost control.

Reported profit before tax stood at £5.6m, while underlying earnings per share reached 13p, compared to 12.3p in the first six months of the 2023 financial year.

Statutory earnings per share for continuing operations were 11.4p, down from 12.5p a year earlier.

Despite the acquisition of ARP Group for a maximum cash consideration of £10m in December, Alumasc maintained a net bank debt of £7.4m, widening slightly from £6.8m a year earlier.

That represented a gearing ratio of 0.5x, comfortably within the bank covenant of less than 2.5x.

The interim dividend per share was hiked to 3.45p, from 3.4p for the first half of the 2023 financial year.

Alumasc's acquisition of ARP, a manufacturer and distributor of specialist metal rainwater and architectural aluminium products, would enhance its water management division, strengthening its rainwater product offerings and delivering consolidation synergies to support strategic growth plans, the board explained.

Looking ahead, Alumasc said it was focussed on sustainable building products, innovation, cost management, and exceptional customer service to navigate the external geopolitical and economic uncertainties that may persist throughout the year.

With significant funding capacity and a clear investment-led strategy for both organic and acquisitive growth, the company said it was aiming to outperform during the period of market volatility.

Alumasc said it was well-positioned for significant long-term growth, driven by structural drivers in energy and water management when market conditions stabilise.

“We are very pleased to report an encouraging first half in which we continued to outperform our underlying construction markets,” said chief executive officer Paul Hooper.

“As expected, UK sales were resilient in a challenging environment; and coupled with strong overseas sales, group revenue and underlying profit before tax grew by 6% and 12% respectively.

“We have again demonstrated the resilience of our business model with its multi-markets exposure.”

Hooper said the company was “delighted” to complete the strategic acquisition of ARP Group during the period.

“There are exciting synergies and opportunities for cross-selling ahead, which will support the delivery of the group's growth ambitions.

“The board remains confident in achieving full year expectations, despite the expected continuation of UK demand headwinds and the further delay of a significant export contract in Hong Kong.”

At 1016 GMT, shares in the Alumasc Group were down 2.98% at 177.55p.

Reporting by Josh White for Sharecast.com.