Polypipe sees faster-than-expected recovery

Revenue from the ‘commercial and infrastructure systems’ division proved to be more resilient – the 14 per cent decrease to £81m was less severe than the 28 per cent drop seen in ‘residential systems’. This was partly thanks to the contribution of drainage specialist Alderburgh – which was acquired in October – as well as work on essential government programmes continuing throughout lockdown.   

Overall revenue bottomed out in April, coming in two-thirds lower than a year earlier. By August, this had recovered to just a 3 per cent shortfall. The recovery has been much faster than even the optimistic scenario Polypipe laid out in May prior to its equity raise. Back then, it was anticipating that revenue from September onwards would be 10-15 per cent lower than in 2019.

Benefitting from the £120m raised through a share placing, net debt (excluding lease liabilities) has more than halved from the December year-end position to £71m, equivalent to 1.1 times pro-forma cash profits. While there is no interim dividend, if trading continues to track above its May expectations, Polypipe will consider declaring a final payout.

House broker Numis anticipates £33m of underlying operating profit for the full year – down from £78m in 2019 – increasing to £64m in 2021.