Eurocell plc Year End Trading Update -- Strong Finish to 2020 (7768L)

TIDMECEL

RNS Number : 7768L

Eurocell plc

15 January 2021

15 January 2021

EUROCELL PLC

("Eurocell" or the "Group")

Year End Trading Update - Strong Finish to 2020

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 year ended 31 December 2020.

Summary

The strong sales performance previously announced for the 4 months to 31 October continued through to the end of the year.

Reported Group sales for H2 were GBP164 million, up 15% on H2 2019. Group sales for the full year were GBP257 million, a reduction of 8% on 2019. Gross margins and operating efficiencies in H2 were in line with our expectations.

As a result of stronger than anticipated sales for November and December, we now believe underlying profit before tax for the full year 2020 will be ahead of current expectations.

Trading Performance

Sales growth rates in 2020 were as follows:

 
 Sales growth          H1     July     Sept    Nov /   H2    Full 
                              / Aug    / Oct    Dec           Year 
                            -------                   ---- 
 Reported 
 Total Group          -31%      11%      15%     19%   15%     -8% 
 Like-for-like(1) 
 Total Group           -4%      12%      14%     21%   15%      8% 
 Profiles Division    -14%       2%       9%     21%   10%     -1% 
 Building Plastics 
  Division              3%      20%      18%     21%   19%     14% 
                     -----  -------  -------          ---- 
 

(1) Like-for-like excludes acquisitions and new branches opened in 2019/20, and is calculated by comparing average sales per trading day in 2020 (i.e. 212 days to 31 December, excluding days closed due to lockdown) with average sales per trading day in 2019 (249 days to 31 December).

The repair, maintenance and improvement (RMI) market was stronger than we anticipated throughout the second half. House building activity has also been increasing, supported by high levels of mortgage approvals. Furthermore, we believe we have continued to gain market share. The H2 like-for-like(1) sales increase of 15% on 2019 was comprised of:

-- Profiles up 10%, including good contributions from trade fabricators, who are substantially focused on the RMI market. New build and commercial markets began the second half slowly, but run rates started to improve from September

-- Building Plastics up 19%, including a strong performance across our range of own-manufactured products and traded goods, as well as an excellent start for our new range of outdoor living products

Whilst strong demand in our markets has put sector supply chains under pressure, we have continued to secure the raw materials we require, supported by our market-leading recycling plants. These facilities currently supply c.25% of our raw material consumption and enhance the sustainability credentials of our business.

Net debt at 31 December 2020 on a pre-IFRS 16 basis was c.GBP10 million (31 December 2019: GBP35 million). Cash receipts from customers have continued to be good throughout H2 and, as at 31 December 2020, substantially all our suppliers had been paid in accordance with terms.

It remains our intention to return to paying dividends in 2021.

New Warehouse

Fit-out of our new state-of-the-art warehouse remains on track. We achieved a major milestone earlier this month, with commercial operations beginning successfully from the new site. In line with our plans, transition will continue over the coming weeks, with the final stages expected to complete in Q2. As well as being central to increasing capacity, the new warehouse is key to delivering anticipated improvements in operational efficiencies.

COVID-19 Update

We have maintained a good health and safety performance, with safe working practices for COVID-19 operating well across the business. In line with UK Government guidance, our manufacturing plants, branch network, distribution and recycling operations all remain open.

Notice of Results

As previously announced, we expect to publish our preliminary results for the year ending 31 December 2020 on 11 March 2021.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

Enquiries:

Eurocell plc

Mark Kelly, Chief Executive Officer

[phone]

Michael Scott, Chief Financial Officer

[phone]

Teneo

Ben Foster

[phone]

Camilla Cunningham

[phone]

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January 15, 2021 02:00 ET (07:00 GMT)