TIDMECEL
RNS Number : 3229T
Eurocell plc
24 November 2021
24 November 2021
EUROCELL PLC
("Eurocell" or the "Group")
Trading Update - Continued Growth, Outlook Confirmed
Eurocell plc, the market leading, vertically integrated UK
manufacturer, recycler and distributor of innovative window, door
and roofline PVC products, provides the following update for the
ten months to 31 October 2021.
Summary
The positive sales trends from H1 have continued into the second
half of the year, supported by good underlying demand in our
markets. We are taking effective action to mitigate ongoing cost
inflation and supply chain pressures. As a result, we remain on
track to deliver profit before tax for the full year in line with
market expectations(1) .
Trading Performance
Group sales for the four months to 31 October were up 18%
compared to 2019 and 5% compared to 2020, with the latter
reflecting a very strong second half last year. For the ten months
to 31 October 2021, sales were up 21% compared to 2019 and 38%
compared to 2020. Divisional growth rates were as follows:
Sales growth 4 months YTD 4 months YTD
to 31 to 31 to 31 to 31
Oct 2021 Oct 2021 Oct 2021 Oct 2021
----------
vs 2019 vs 2020
----------------------
Total Group 18% 21% 5% 38%
Profiles Division 19% 19% 14% 48%
Building Plastics Division 18% 23% -1% 32%
---------- ---------- ----------
Whilst demand in the repair, maintenance and improvement (RMI)
market has moderated from the unprecedented levels experienced in
H2 2020 and H1 2021, this sector remains strong. Furthermore, we
believe we are also continuing to take market share. Group sales
growth for the ten months to 31 October of 21% compared to 2019
includes:
-- Profiles up 19% - good contributions from trade fabricators,
who are substantially focused on the RMI market, and another very
strong performance from Vista doors. New build has enjoyed improved
sales in the second half, with the house builders now focused on
achieving year end completion targets
-- Building Plastics up 23% - good performance across our full
range of own-manufactured products and traded goods, including more
than 50% growth in outdoor living products, supported by a
consistently strong order book. We opened 8 new branches in the
first ten months, with a further 4 new sites to follow by the end
of the year. 4 of this year's new branches are the new larger
format
We have continued to secure most of the raw materials we
require, and we are mitigating raw material cost inflation with
selling price increases, and primarily for resin, a surcharge
adjusted monthly in response to price changes.
Higher resin costs are also partially offset by our
market-leading recycling plants, which as well as keeping up with
increased demand, continue to improve the proportion of recycled
material used in our primary extrusion operations. So far this
year, these plants have supplied 27% of our raw material
consumption (year ending 31 December 2020: 25%), driving
significant cost and carbon savings compared to the use of virgin
material.
FTSE Green Economy Mark(2)
We are pleased to report that Eurocell has received the London
Stock Exchange's (LSE) Green Economy Mark, which is awarded to
companies that derive more than 50% of revenues from environmental
solutions, and reflects contributions to the global green economy.
In our case, the LSE also recognised that our PVC profiles can be
recycled up to 10 times and have a life span of around 100 years.
The fact that we operate recycling plants and use recycled material
in our products was also a significant factor.
New Warehouse and Manufacturing Capacity Expansion
Fit-out of our new state-of-the-art warehouse is now complete.
As well as being central to increasing capacity, the facility is
key to delivering further improvements in operational efficiencies
as the new plant, systems and processes become embedded. We were
delighted that, earlier this month, the facility won the Warehouse
Initiative Prize at the National Supply Chain Excellence Awards.
The award recognises the innovative storage and picking solutions
implemented, alongside improved safety and sustainability
criteria.
The manufacturing capacity expansion planned for this year,
including 5 new extrusion lines, together with the associated
mixing plant upgrade and tooling, is now substantially complete. As
previously reported, we plan to add a further 5 lines in 2022.
These investments increase extrusion capacity by more than 15%,
thereby enabling future sales and market share growth.
Notice of Results
We expect to publish our results for the year ending 31 December
2021 on 18 March 2022.
Notes
(1) Eurocell calculated analyst consensus profit before tax forecast for 2021 of GBP26.5 million.
(2) This classification, first introduced in 2019, was created
to highlight companies and investment funds listed on all segments
of London Stock Exchange's Main Market and AIM that are driving the
global green economy. To qualify for the Green Economy Mark,
companies and funds must generate 50% or more of their total annual
revenues from products and services that contribute to the global
green economy.
The underlying methodology incorporates the Green Revenues data
model developed by FTSE Russell. It provides a detailed taxonomy of
environmental goods, products and services, and is designed to
recognise both 'pure-play' green technology companies, as well as
those across all industries that make significant contributions to
the transition to a sustainable, low carbon economy.
Enquiries:
Mark Kelly, Chief Executive +44 (0) 1773 842
Officer 105
Michael Scott, Chief Financial +44 (0) 1773 842
Officer 140
+44 (0) 777 624
Ben Foster (Teneo) 0806
END
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