Another strong out-turn from Polypipe (PLP), aided by the contribution of the Nuaire ventilation acquisition, which helped to drive revenues by nearly a third on the 2015 half year, while underlying earnings were 48 per cent to the good. The acquisition of Nuaire has also enabled Polypipe to further integrate its client offering, effectively marrying Nuaire's mechanical systems with Polypipe's existing ducting products.
Demand from all segments of Polypipe's core UK markets has remained robust despite the apparent slowdown in nationwide construction activity. The group confirmed that orders are in line with the regular seasonal pattern and the EU referendum has yet to have any discernible effect on trading. This is borne out by the performance of the UK commercial and infrastructure business where revenues came in 57 per cent ahead of the 2015 half year at £92.7m.
Operating cash flow soared in the six months through to June, and while net finance charges were up through the period, management has swiftly pared back the debt overhang from the Nuaire acquisition. By the end of the year, net debt is forecast to hit the targeted ratio of double cash profits - down from a multiple of 2.5 times a year earlier.
Deutsche Bank anticipates pre-tax profits of £59m for the December year-end, giving way to EPS of 23.6p, against £46m and 18.2p in 2015.
| POLYPIPE GROUP (PLP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 294p | MARKET VALUE: | £586m | |
| TOUCH: | 294p-295p | 12-MONTH HIGH: | 367p | LOW: 217p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 137p* | NET DEBT: | 70% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 170 | 23.2 | 9.1 | 2.3 |
| 2016 | 223 | 29.9 | 12.0 | 3.1 |
| % change | +31 | +29 | +32 | +35 |
Ex-div: 24 Aug Payment: 23 Sep *Includes intangible assets of £375m, or 188p a share | ||||
