Polypipe's revenues rise, no adverse impact from EU referendum

Plastic piping systems manufacturer Polypipe’s revenues were up, as the EU referendum did not have an adverse affect on sales and orders, while it anticipates it will meet full-year expectations.

For the 10 months ended 31 October, revenue increased 23.7% to £370.3m, compared to the same period last year, with overseas revenue gaining from the weak sterling exchange rate.

Like-for-like revenue, excluding acquisitions and at a constant currency basis, grew 7.1%.

The FTSE 250 company said that “strong” like-for-like growth in the UK in the first half of the year had continued and there was no impact on revenue and order intake since the June EU referendum.

Revenue for the quarter ended 31 October rose like-for-like to 8%, due to growth in both the Residential segment, up 4.2% supported by demand from housebuilders, and the Commercial and Infrastructure segment, which was higher at 14.9%.

The decline in sterling “adversely impacted” the company's polymer input costs, although it is confident of recovering this effect by increasing selling prices, as it has done in the past, but there is “inevitably a time lag for the benefit of these price increases to materialise which will have a slight impact on margins in the second half of this financial year”.

For mainland Europe, revenue climbed 14.2% due to favourable currency translation, and up 2.5% on a like-for-like basis.

For the quarter ended 31 October, like-for-like revenue fell by 9.9%, but the company maintained that its European operations are expected to remain profitable for the full year.

The company said it was on track to meet its outlook for the full-year and that net debt will be in line with expectations.

Chief executive David Hall said: "I have confidence that our broad based exposure to UK residential, commercial and infrastructure sectors of the construction market, a broad range of quality products, strong customer relationships and market leading technical expertise leaves us well positioned for 2017."

Shares in Polypipe were up 4.43% to 271.52p at 0802 GMT.