Polypipe shares surge on back of “resilient” first half
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Polypipe shares surge on back of “resilient” first half

Polypipe, a manufacturer of plastic piping and ventilation systems for the residential, commercial, civil, and infrastructure sectors, posted its first half results for the year this week. Those results clearly demonstrate an underlying business that the group described as “resilient”. The company said that its financials met expectations and reiterated its guidance for the full year, which it said it would meet despite difficulties. Polypipe’s share price surged as a result.

Shares in Polypipe shot up by 8% on the back of robust earnings

graph 1508 polypipe

SOURCE: Yahoo Finance

Despite difficult weather conditions, UK revenues increased by 1% year on year - that’s a slowdown from the previous period, but in light of the headwinds faced, it represents a robust business. If you strip out the effects of weather, organic growth for the first half would come in at 5% - a much more impressive figure. The company’s cash from operations also increased by 6% year on year, with revenue from UK residential systems (+6% against the first half of 2017) driving results.

The company’s chief executive, Martin Payne, made the following statement: “Against a backdrop of mixed market conditions and adverse weather the group has performed well in the first half. With the group’s balanced business model, underpinned by the long-term growth drivers of legacy material substitution and continuing legislative tailwinds in water management and climate change, I am confident the group will make good progress in the second half of the year.”

Disclosure

Dominion holds Polypipe in its Global Trends Managed Fund.


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