Polypipe (PLP) delivered record results for 2017, pushing underlying operating profits ahead by 6 per cent to £72.6m. Once again, demand for plastic piping and ventilation systems was buoyed by the new-build housing market, while the repair, maintenance and improvement sector (RMI) was relatively subdued.
Key decisions taken through the year included the expected disposal of its French subsidiary, with completion pencilled in for the first half of 2018. Although profitable, margins were comparatively unattractive, with turnover of £58.4m generating underlying profits of just £1.4m. It also closed its operation in Dubai following the introduction of a trade embargo between Qatar and other Gulf states. There are still plenty of work opportunities in the Middle East, but the decision has been taken instead to employ sub-contractors where business opportunities arise.
Sterling weakness inflated the cost of the core polymer ingredient used to make plastic pipes, and these costs were passed on to customers. Further price rises are expected to be implemented later this year to offset additional cost increases resulting from higher oil prices.
Analysts at Numis are forecasting adjusted pre-tax profits for the year to December 2018 of £69.6m and EPS of 28.2p (from £65.7m and 26.9p in 2017).
| POLYPIPE (PLP) | ||||
| ORD PRICE: | 396.2p | MARKET VALUE: | £791m | |
| TOUCH: | 395.8-396.2p | 12-MONTH HIGH: | 440p | LOW: 337p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 151p* | NET DEBT: | 49% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 301 | 24.6 | 26.7 | nil |
| 2014 | 327 | 16.9 | 7.0 | 4.5 |
| 2015 | 353 | 41.5 | 17.1 | 7.8 |
| 2016 | 387 | 53.5 | 21.8 | 10.1 |
| 2017 | 412 | 55.6 | 22.7 | 11.1 |
| % change | +6 | +4 | +4 | +10 |
| Ex-div: | 19 Apr | |||
| Payment: | 25 May | |||
| *Includes intangible assets of £357m, or 179p a share | ||||
