It’s been a rough year for shareholders in building products companies. For the most part, they’ve continued to trade profitably, passing the higher input prices they’ve suffered through to customers. However, growth prospects for the sector look grim.
On Monday, the Construction Products Association (CPA) said it expected output to shrink by 3.9 per cent next year, a sharp downward revision from its most recent summer forecast of a 0.4 per cent contraction.
Genuit (GEN), still best known for its Polypipe arm but which supplies everything from ventilation systems to underfloor heating, said in a late October trading update that its full-year profit would be at the lower end of analysts’ expectations, citing tougher recent trading.
Its share price closed the week ending 4 October down 60 per cent over the past 12 months, more than double the subsector average decline of 28.5 per cent, according to FactSet.
Brokers are also unsure about its prospects. Jefferies has cut its earnings per share forecast on Genuit by 35 per cent for 2023, although it argues that even at this lower number the valuation of around 14 times earnings looked “inexpensive” compared with its long-run average.
Chairman Kevin Boyd clearly thinks the shares have been oversold. He picked up more than £100,000-worth on 3 November.
It would be brave to call the bottom of this market just yet, though. The CPA expects housebuilders’ output to shrink by 9 per cent this year, with new starts falling by 10 per cent. And as a prolonged period of low mortgage rates unwinds, existing homeowners forced to refinance at higher rates will have less money to spend on home improvements, it added.
Given that Genuit’s residential systems arm made up almost two-thirds of its half-year revenue of £318mn, a rapid bounceback in its fortunes seems unlikely.
| Buys | ||||
| Company | Director/PDMR | Date | Price (p) | Aggregate value (£) |
| AIB Group | Colin Hunt (ce) * | 01 Nov 22 | 255 † | 25,542 † |
| Airtel Africa | John Danilovich | 27 Oct 22 | 113 | 99,698 |
| Allied Minds | Bruce Failing (ch) | 20-27 Oct 22 | 9 † | 34,882 † |
| Aston Martin Lagonda | Sir Nigel Boardman | 03 Nov 22 | 91 | 34,808 |
| Belluscura | David Poutney * | 28 Oct 22 | 45 | 117,884 |
| FD Technologies | Seamus Keating (ce) | 28 Oct 22 | 1,290 | 96,802 |
| Frasers | David Daly (ch) | 03 Nov 22 | 645 | 20,098 |
| Genuit | Kevin Boyd (ch) | 03 Nov 22 | 251 | 100,345 |
| IP | Christopher Glasson (cfo) | 28 Oct 22 | 59 | 44,023 |
| Irish Residential Properties Reit | Hugh Scott-Barrett | 02 Nov 22 | 97 † | 38,907 |
| Moneysupermarket.com | Robin Freestone (ch) | 03 Nov 22 | 179 | 39,793 |
| Property Franchise | Gareth Samples (ce) | 03 Nov 22 | 332 | 29,880 |
| Rainbow Rare Earths | George Bennett | 31 Oct 22 | 10 | 43,065 |
| Riverstone Energy | Richard Horlick (ch-d) | 27 Oct 22 | 620 | 62,000 |
| Seeing Machines | Catherine Hill (ch) | 31 Oct 22 | 7 | 27,840 |
| Shepherd Neame | Richard Oldfield (ch) | 18-21 Oct 22 | 680 | 64,600 |
| WAG Payment Solutions | Paul Manduca (ch) | 31 Oct 22 | 81 | 40,575 |
| Weir | Stephen Young | 03 Nov 22 | 1,607 | 31,835 |
| Wizz Air | Yvonne Moynihan * | 02 Nov 22 | 1,658 | 73,449 |
| Sells | ||||
| Company | Director/PDMR | Date | Price (p) | Aggregate value (£) |
| Angus Energy | Paul Forrest | 27-Oct-22 | 2 | 1,683,000 |
| Cornish Metals | Owen Mihalop (coo) | 28 Oct-2 Nov 22 | 15 | 38,000 |
| Energean | Angelos Mastrantonis | 31 Oct-1 Nov 22 | 1,447 | 340,160 |
| Live Company | Ranjit Murugason | 26 Oct-4 Nov 22 | 3 | 75,200 |
| Lok'nStore | Simon Thomas | 04 Nov 22 | 925 | 231,200 |
| *Spouse/Family/Close Associate. ** placing / open offer † Converted from € / $ | ||||
