At first glance it looks like Polypipe (PLP) blew a gasket in the first half. But strip out one-off costs from its listing in April and the refinancing of some debt and the UK's largest manufacturer of plastic piping systems grew its operating profit by 29 per cent to £22.7m.
The group saw a surge in demand from property developers as the domestic construction recovery accelerated. It also benefited from more housing transactions: homeowners typically spend the most on upgrading second-hand properties in the 18 months after they buy them and then just before they sell. These trends drove a 14 per cent increase in Polypipe's UK operating revenues to £143m - although that was partly offset by a depressed commercial and infrastructure piping market in Europe, where sales dipped 3 per cent to under £31m.
Polypipe expanded its Polysure plastic plumbing range and released new add-ons for air ducting and high-voltage systems. It also tackled structural changes in the construction market, addressing new legislation governing energy usage and flood control by offering products designed to improve carbon efficiency and water management.
Broker Numis Securities expects adjusted pre-tax profit of £34.6m, giving EPS of 14.8p, rising to £44.6m and 18.7p in 2015 (from £24.5m and 10p in 2013).
| POLYPIPE (PLP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 248p | MARKET VALUE: | £496m | |
| TOUCH: | 244-248p | 12-MONTH HIGH: | 274p | LOW: 231p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 58 | |
| NET ASSET VALUE: | 114p* | NET DEBT: | 44% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 152 | 9.7 | 4.0 | nil |
| 2014 | 168 | -4.6 | -1.8 | 1.50 |
| % change | +11 | - | - | +150 |
Ex-div: 27 Aug Payment: 26 Sep *Includes intangible assets of £234m, or 117p a share | ||||
