Polypipe (PLP), which manufactures plastic piping and ventilation systems for the residential, commercial and infrastructure markets, benefited from price increases and full-year contributions from acquisitions in the UK last year. Both factors helped offset a decline in sales volumes as Brexit uncertainty weighed on construction activity.
In ‘residential systems’, most of its products are used in the early stages of site development and, according to the Construction Products Association, new UK housing starts were 8 per cent lower than in 2018. On a like-for-like basis, sales were flat as price increases were offset by merchants winding down Brexit contingency stockpiles. However, after accounting for the 2018 acquisition of Manthorpe – a manufacturer of plastic and metal building products – revenue grew 6 per cent to £260m. On top of efficiency improvements at it manufacturing plant, this acquisition drove a 1.6 percentage point margin expansion to 20.5 per cent, pushing underlying operating profit up 15 per cent to £53.4m.
Things were less positive in ‘commercial and infrastructure systems’ where underlying operating profit dropped more than a tenth to £24.7m. The uncertain economic and political environment saw projects delayed and cancelled, compounded by flooding in the north of England and Midlands.
House broker Numis anticipates adjusted pre-tax profit of £76.4m and EPS of 31.1p in 2020, rising to £78.5m and 31.9p in 2021.
| POLYPIPE (PLP) | ||||
| ORD PRICE: | 466p | MARKET VALUE: | £ 929m | |
| TOUCH: | 466-467p | 12-MONTH HIGH: | 620p | LOW: 365p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 181p* | NET DEBT: | 46%** | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 353 | 41.5 | 17.1 | 7.8 |
| 2016 | 387 | 53.5 | 21.8 | 10.1 |
| 2017 | 412 | 55.6 | 22.7 | 11.1 |
| 2018 | 433 | 58.2 | 24.5 | 11.6 |
| 2019 | 448 | 60.1 | 24.9 | 12.1 |
| % change | +3 | +3 | +2 | +4 |
| Ex-div: | 23 Apr | |||
| Payment: | 28 May | |||
| *Includes intangible assets of £402m, or 202p a share. **Includes £14.8m in lease liabilities | ||||
