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Eurocell and an almost perfect storm

Eurocell and an almost perfect storm

As a manufacturer, distributor and recycler of PVC building materials, Eurocell (ECEL) uses resin – which is priced in pounds, but whose underlying components are priced in euros and dollars. So sterling’s weakness thus forced the company to pay higher prices for raw materials in 2017. Management partly offset these costs by lifting their own selling prices, meaning the gross margin only fell by one percentage point. However, such inflationary pressures were part of a wider “almost perfect storm” of macro-economic challenges, along with a subdued repair, maintenance and improvement market.

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