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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Polypipe Group Plc | LSE:PLP | London | Ordinary Share | GB00BKRC5K31 | ORD GBP0.001 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 567.00 | 565.00 | 567.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMPLP
RNS Number : 2512W
Polypipe Group PLC
15 April 2019
15 April 2019
Polypipe Group plc
Annual Financial Report for the year ended 31 December 2018
and Notice of 2019 Annual General Meeting
Polypipe Group plc ("Polypipe", the "Company" or the "Group") today published its Annual Report and Accounts for the year ended 31 December 2018 (the "2018 Annual Report") and Notice of its 2019 Annual General Meeting. The Company will hold its Annual General Meeting at 10.30 am on Thursday 23 May 2019 at the Holiday Inn, High Road, Doncaster, DN4 9UX.
Copies of the 2018 Annual Report and the Notice of the 2019 Annual General Meeting are available to view on the Company's website at www.polypipe.com and, in accordance with Listing Rule 9.6.1 of the UK Financial Conduct Authority ("FCA"), will also shortly be submitted to the National Storage Mechanism and will be available for inspection at http://www.morningstar.co.uk/uk/NSM.
Copies of those documents are being posted or made available to the Company's shareholders today.
The information included in the final results announcement released on 19 March 2019 under RNS Number 2185T, together with the information in the Appendix to this announcement which is extracted from the 2018 Annual Report, constitute the materials required by the FCA's Disclosure Guidance and Transparency Rule 6.3.5 to be communicated to the media in full unedited text through a Regulatory Information Service. This announcement is not a substitute for reading the 2018 Annual Report in full.
APPIX A
1. PRINCIPAL RISKS & UNCERTAINTIES
Framework for managing risk
The Board is responsible for ensuring that the Group maintains an effective risk management system. It determines the Group's approach to risk, its policies and the procedures that are implemented to mitigate exposure to risk.
Process
The Board continually assesses and monitors the key risks in the business and Polypipe has developed a risk management framework to identify, report, and manage its principal risks and uncertainties. This includes the recording of all principal risks and uncertainties on
a Group Risk Register, which is updated at least every six months. Risks are fully analysed, allocated owners, scored for both impact and probability, prioritised, and assessed for what mitigation is required.
External risks include economic conditions, the weather, Government action, policies and regulations, raw material prices and information systems disruption. Internal risks include reliance on key customers, and recruitment and retention of key personnel.
The Board seeks to mitigate the businesses' exposure to strategic, financial and operational risk, both external and internal. The effectiveness of key mitigating controls is continually monitored and subjected to periodic testing by the Group's internal
audit function.
The heat map and table that follows highlight the principal risks and uncertainties that could have a material impact on the Group's performance and prospects and the mitigating activities which are aimed at reducing the impact or likelihood of a major risk materialising. These risks have all been considered by the Board when developing the Group's Viability Statement. The Board does recognise, however, that it will not always be possible to eliminate these risks entirely. In addition, the principal risks listed below do not comprise all of the risks that the Group may face and they are not listed in order of priority, probability or magnitude of potential impact.
Risk appetite
The Board determines the appropriate level of risk for operating the business and pursuing its strategic objectives. A key focus of the Board is minimising exposure to financial, operational, human, legislative and reputational risks.
Process
Top down:
Identifying, assessing and mitigating risk at Group level
Bottom up:
Identifying, assessing and mitigating risk at business operational level
The Board
The Board continually assesses and monitors the key risks in the business and Polypipe has developed a risk management framework to identify, report, and manage its principal risks and uncertainties.
This includes:
-- The recording of all principal risks and uncertainties on a Group Risk Register which is updated at least every six months.
-- Analysing risks and allocating owners. -- Scoring risks for impact and probability to determine the exposure to the business. -- Outlining which risks should be prioritised and what mitigation is required.
Internal audit
The effectiveness of key mitigating controls is continually monitored and subjected to periodic testing by the Group's internal audit function.
Operational level
The risk management processes are embedded into the different operational areas within the Group.
Hot Features
Premium
Change in
potential
impact and/or
Risk Potential impact Mitigation probability
----------------------------- ---------------------------- ------------------------------- --------------
1. Failure to manage the availability of raw materials supply and pricing
- Brexit
------------------------------------------------------------------------------------------------------------
The Group is exposed Any increase in the The Group seeks to Increased
to volatile raw material market price of crude pass on raw material
prices, particularly oil or other petroleum price increases to
polymers, due to feedstocks, foreign its customers wherever
fluctuations in the currency exchange possible. There is
market price of crude rate movements, or usually at least a
oil and other petroleum changes to suppliers' three-month time lag
feedstocks, foreign manufacturing capacity from notification
currency exchange could have a direct of the raw material
rate movements, and impact on the prices price increase before
changes to suppliers' the Group pays for selling prices can
manufacturing capacity. raw materials which be adjusted in the
could adversely affect market.
its financial results. Competitors of the
This impact is potentially Group are likely to
exacerbated experience the same
by a no-deal Brexit. pressures of any sustained
raw material price
increases.
Brexit - the Group
is planning a temporary,
proportionate increase
in working capital
in the first half
of 2019 to secure
supply of raw materials
against short-term
disruption at ports.
----------------------------- ---------------------------- ------------------------------- --------------
2. Business disruption
----------------------------- ---------------------------- ------------------------------- --------------
The Group's manufacturing Such incidents could The Group has developed No change
and distribution result in the temporary business continuity,
operations could cessation in activity, crisis response, and
be subjected to disruption or disruption, at disaster recovery
due to incidents one of the Group's plans.
including, but not production facilities The Group performs
limited to, fire, impeding the ability regular maintenance
failure of equipment, to deliver its products to minimise the risk
power outages, workforce to its customers, of equipment failure.
strikes, or unexpected thereby adversely Finished goods holdings
or prolonged periods affecting the Group's across the operations
of severe weather. financial results. act as a limited buffer
In addition, prolonged in the event of operational
periods of severe failure.
weather could result The Group has the
in a slowdown in ability to transfer
site construction some of its production
activity reducing to alternative sites
the demand for the and could also subcontract
Group's products, some of its tooling
thereby adversely to reduce any potential
affecting its loss in production
financial results. capacity.
The Group maintains
a significant amount
of insurance to cover
business interruption
and damage to property
from such incidents.
Independent insurer
inspections take
place across all
sites to identify
and
assess potential
hazards and business
interruption risks.
----------------------------- ---------------------------- ------------------------------- --------------
3. Reliance on key
customers
----------------------------- ---------------------------- ------------------------------- --------------
Some of the Group's Failure to manage The Group's strategic No change
businesses are dependent relationships with objective is to broaden
on key customers key customers, while its customer base
in highly competitive continuing to provide wherever possible.
markets. high-quality products The Group focuses
delivered on time on delivering exceptional
in full, and developing customer service and
new innovative products, maintains strong relationships
could lead to a loss with major customers
of business, thereby through direct engagement
adversely affecting at all levels.
the Group's financial The Group maintains
results. customer service matrices
which are continually
tracked and monitored
with intervention
made where required.
The Group closely
manages its pricing,
rebates, and commercial
terms with its customers
to ensure that they
remain competitive.
The Group continually
seeks to innovate
and develop its product
lines to ensure its
products are to the
standard our customers
expect.
----------------------------- ---------------------------- ------------------------------- --------------
4. Recruitment and retention of key personnel
------------------------------------------------------------------------------------------------------------
The Group is dependent Loss of any key personnel The Group has a formal Reduced
on the continued without adequate succession plan in
employment and performance and timely replacement place facilitating
of our senior management could disrupt business staff retention and
team and other key operations and the progression through
skilled personnel. Group's ability to the Group. This succession
implement and deliver plan has been augmented
its growth strategy. through recent recruitment.
The Group aims to
provide competitive
remuneration packages
and incentive schemes
to retain and motivate
key personnel.
----------------------------- ---------------------------- ------------------------------- --------------
5. Economic conditions
- Brexit
----------------------------- ---------------------------- ------------------------------- --------------
The Group is dependent Lower levels of activity The Group closely Increased
on the level of activity within the construction monitors trends in
in the construction industry could reduce the industry, invests
industry and is therefore sales and production in market research
susceptible to any volumes, and is an active member
changes in its cyclical thereby adversely of the Construction
economic conditions. affecting the Products Association.
Group's financial The Group uses Construction
results. Products Association
and Euroconstruct
forecasts in its budgeting
process.
The Group closely
manages its demand
forecasts and costs
through weekly operational
review meetings.
----------------------------- ---------------------------- ------------------------------- --------------
6. Change in Government actions and policies relating to public and private
investment
------------------------------------------------------------------------------------------------------------
The Group is in part Significant downward The Group's strategy No change
dependent on Government trends in Government is to have its operations
action and policies spending on public structured so that
relating to public and private investment it has a balanced
and private investment arising from economic exposure to the residential,
and is therefore uncertainty and ongoing commercial and infrastructure
susceptible to changes austerity policies construction sectors
in Government spending could have an adverse so as to reduce the
priorities. impact on the construction impact of any adverse
industry which could Government action
impact on sales and or policy on any one
production volumes, of the construction
thereby adversely sectors.
affecting the Group's The Group closely
financial results. monitors trends in
the industry, invests
in market research
and is an active member
of the Construction
Products Association.
The Group closely
manages its demand
forecasts and costs
through weekly operational
review meetings.
----------------------------- ---------------------------- ------------------------------- --------------
7. Environmental regulations and other obligations relating to environmental
matters
------------------------------------------------------------------------------------------------------------
The Group is subject Failure of the Group The Group has a formal No change
to the requirements to comply with changes Health, Safety and
of UK and European to environmental Environmental policy,
environmental and regulations and other and procedures are
occupational safety obligations relating in place to monitor
and health laws and to environmental compliance with the
regulations, including matters could result policy.
obligations to investigate in the Group being The Group performs
and clean up environmental liable for fines, internal environmental
contamination on require modification audits and is subjected
or from properties. to operations, increase to external environmental
manufacturing and audits on a periodic
delivery costs, and basis.
could result in the The Group performs
suspension or termination weekly and monthly
of necessary operational reporting on key health,
permits, thereby safety and environmental
adversely affecting matters which require
the Group's financial the attention of the
results. Board.
----------------------------- ---------------------------- ------------------------------- --------------
8. Product failures in the marketplace could harm our reputation and our
results of operation
------------------------------------------------------------------------------------------------------------
The Group manufactures A product failure The Group operates No change
products that are or recall could result comprehensive
potentially vital in a liability claim quality assurance
to the safe operation for personal injury systems and procedures
of its customers' or other damage leading at each site.
products or processes. to substantial financial Wherever required,
These products are settlements, damage the Group obtains
often incorporated to the Group's brand certifications over
into the fabric of reputation, costs its products to the
a building or dwelling and expenses and relevant national
or buried in the diversion of key and European standards
ground as part of management's attention including Kitemarks,
an infrastructure from the operation BBAs, WRCs and WRACs.
system and in each of the Group, which The Group maintains
case, could all adversely product liability
it would be difficult affect the Group's insurance to cover
to access, repair, financial results. third party claims
recall or replace arising from potential
such products. product failures or
recalls.
----------------------------- ---------------------------- ------------------------------- --------------
9. Failure of information systems
------------------------------------------------------------------------------------------------------------
The Group is dependent Disruption or failure The Group contracts No change
on the continued of the information with several third-party
efficient operation systems could affect providers to supply
of its information the Group's ability off-site, business
systems and is therefore to conduct its ongoing continuity arrangements
vulnerable to potential operations which for wholesale or partial
failures due to power could adversely affect recovery of the key
losses, telecommunication the Group's financial servers and applications
failures, or from results. which are used within
an external security the various business
breach due to the units of the Group.
increasing levels These continuity
of sophisticated arrangements are subject
cybercrime now threatening to periodic validation
businesses. and testing.
Some business units
of the Group also
take advantage of
their multi-site operations
to provision server
and applications recovery
between those sites.
There are a range
of local, business
unit-specific, back-up
processes which
are performed on
a daily, weekly and
monthly basis.
Firewalls are in place
to protect the perimeter
of the Group's networks
and any off-site access
to the Group's servers
and applications is
through secure Virtual
Private Network connections.
In addition, email
and Internet traffic
filtering is in place
to protect against
potential viruses
or malware entering
the Group's networks.
User and server computing
devices have anti-virus
software installed
to protect from potential
infection.
The Group continually
invests in the maintenance
and upgrade of IT
infrastructure and
information systems.
All upgrades are
carefully planned
and actively managed
by senior personnel
to minimise potential
business disruption.
----------------------------- ---------------------------- ------------------------------- --------------
10. Acquisitions do not perform as expected
-------------------------------------------------------------------------------------------- --------------
The management of Ineffective management Full due diligence No change
acquisitions' activity of acquisitions could is performed
and their integration lead to management before any acquisition
play a part in delivering distraction, is made.
the Group's growth a drain on financial The Group seeks contractual
strategy and there resources, and impact assurances from the
is a risk that any on the Group's ability sellers to mitigate
acquisitions may to successfully implement against any identified
not perform as expected. and deliver issues or risks.
its growth strategy. Formal Board level
approvals are required
in accordance with
the Group's delegation
of authority structure
for any acquisition
activity. Where appropriate,
the Group will pay
deferred consideration
linked to the ongoing
performance of the
acquisition.
The progress of any
integration is closely
monitored at Board
and senior management
team level.
----------------------------- ---------------------------- ------------------------------- --------------
11. Foreign currency
risk
----------------------------- ---------------------------- ------------------------------- --------------
The risk that the Foreign currency The Group enters into Reduced
fair value of a financial exchange rate fluctuations forward foreign currency
instrument or future could adversely affect exchange rate contracts
cash flows will fluctuate the Group's financial for the purchase and
because of changes results. sale of foreign currencies
in foreign currency to manage its exposure
exchange rates. The to fluctuations in
Group's risk relates foreign currency exchange
primarily to its rates primarily in
operating activities respect of US Dollars
where the revenue and Euros relative
or expense is denominated to Pounds Sterling.
in a currency other It is not possible
than the functional for the Group to mitigate
currency of the entity foreign currency exchange
undertaking the transaction. rate movements which
impact the translation
of its overseas subsidiaries'
results and net assets
as all the Group's
long-term borrowings
are Pounds Sterling
denominated. However,
with the disposal
of the French business,
foreign currency risk
has been reduced.
----------------------------- ---------------------------- ------------------------------- --------------
12. Credit risk
----------------------------- ---------------------------- ------------------------------- --------------
The risk that a counterparty The failure of a Customer credit risk No change
of the Group will counterparty to meet is managed by each
not be able to meet their financial obligations business unit subject
its obligations under could lead to to the Group's established
a financial instrument a financial loss policy, procedures
or customer contract. for the Group. and controls relating
The Group is exposed to customer credit
to credit risk from risk management. Credit
its trading activities quality of the customer
(primarily from trade is assessed based
receivables) and on an extensive credit
from its financing rating scorecard and
activities, including individual credit
deposits with banks. limits are defined
in accordance with
this assessment.
Outstanding customer
receivables are regularly
monitored and any
shipments to major
export customers are
generally covered
by letters of credit
or credit insurance.
Where the Group perceives
there to be a significant
credit exposure it
will take out credit
insurance or obtain
an irrevocable letter
of credit prior to
any transaction.
Credit risk arising
from cash deposits
with banks is managed
in accordance
with the Group's
established treasury
policy, procedures
and controls. Investments
of surplus funds are
made only with banks
that have as a minimum
a single A-credit
rating.
----------------------------- ---------------------------- ------------------------------- --------------
13. Liquidity risk
----------------------------- ---------------------------- ------------------------------- --------------
The risk that the Insufficient funds The Group's approach Reduced
Group will not be could result in the to managing liquidity
able to meets its Group not being able is to ensure that
financial obligations to fund its operations. it will always have
as they fall due. sufficient liquidity
to meet its liabilities
when due, under both
normal and stressed
conditions, without
incurring unacceptable
losses or risking
damage to the Group's
reputation. The successful
completion of the
refinancing of the
RCF has reduced this
risk.
----------------------------- ---------------------------- ------------------------------- --------------
14. Interest rate
risk
----------------------------- ---------------------------- ------------------------------- --------------
The risk that interest Increases to interest To reduce the Group's No change
rates could rise rates could result exposure to future
impacting on the in significant additional increases in interest
Group's borrowings. interest rate cash rates, the Group has
payments being required entered into interest
on any borrowings. rate swaps from variable
to fixed interest
rates. These will
be progressively renewed
when necessary to
ensure appropriate
levels of cover for
utilisation of Group
lending.
----------------------------- ---------------------------- ------------------------------- --------------
15. Failure to manage health and safety resulting in fatality or serious
injury
------------------------------------------------------------------------------------------------------------
The risk that management Lack of management There is a Group Health No change
fail to take the focus and and Safety Director
correct measures a poor cultural (with a team throughout
to prevent fatalities attitude towards the Group) with clear
or serious injury. health and safety accountability for
could result in increased health and safety
incidences and serious ('H&S'). H&S performance
or indeed fatal accidents. is tracked weekly
by all levels of management
and investigations
performed to uncover
cause and key learnings
as quickly as possible.
If employees have
failed to adhere to
H&S policies, then
they may be subject
to disciplinary action.
Key messages are constantly
reinforced throughout
the organisation.
----------------------------- ---------------------------- ------------------------------- --------------
16. Agreement of unfavourable commercial terms
------------------------------------------------------------------------------------------------------------
The risk that new Lack of experience The Group employs No change
contracts in negotiating commercial experienced procurement
(or renewed contracts) terms and insufficient specialists to ensure
with oversight of such key supplies are secured
suppliers and merchants negotiations may on the best possible
may contain unfavourable result in unfavourable terms (e.g. polymers).
commercial terms. commercial terms In other areas of
being contracted. the business, larger
contracts are only
negotiated by more
senior managers. Significant
contracts are also
reviewed by Group
legal counsel.
----------------------------- ---------------------------- ------------------------------- --------------
17. Fraud including misreporting of periodic financial information by business
units to the Group
------------------------------------------------------------------------------------------------------------
The risk that actuals Lack of experience Results are subject No change
reporting and forecasting or oversight as well to regular analytical
may be misreported as possible excessive review by senior management
to the Group by the pressure placed on at Group level and
business units. managers may result appropriate enquiries
in the misreporting are made if anomalous
of results (both results are seen.
actuals as well as Balance sheet reviews
forecasts). will be introduced
throughout the Group
to help uphold the
integrity of financial
reporting. Financial
results are also subject
to one external review
('interims') as well
as a full external
audit by Ernst & Young
LLP each year. Internal
auditing also conducts
reasonable procedures
to help prevent material
misstatements.
----------------------------- ---------------------------- ------------------------------- --------------
18. Breach of Group policies regarding Competition Law, the Bribery Act
and Sanctions Compliance
------------------------------------------------------------------------------------------------------------
Fines may be levied Alongside the financial Training is provided No change
on the Group and/or impact of fines, to all new relevant
individuals if legislation breaches could result employees on Competition
is breached. This in damage to the Law including those
legislation includes, Group's reputation changing roles.
but is not limited and adversely impact Annual declarations
to, Competition Law, potential current of compliance are
the Bribery Act and and future business. undertaken in respect
Sanctions Compliance. of Competition Law
and the Bribery Act.
A Sanctions Compliance
Policy is in place
and all business in
higher risk countries
requires approval
by the Company Secretary.
An external agency
(Reuters) is used
to check Sanctions
against companies
and/or individuals.
----------------------------- ---------------------------- ------------------------------- --------------
19. Political unrest in the Middle East
------------------------------------------------------------------------------------------------------------
Political unrest A negative impact Financial performance, No change
in the Middle East to the Group's Middle including future expectations,
could adversely impact East operations could is discussed weekly
the Group's Middle adversely impact while cash is remitted
East operations and/or the Group's financial to the Group treasury
create a threat results and its ability team frequently to
to the safety of to deliver its growth minimise the impact
Group employees. strategy. to the Group of any
If the safety of changes in the Middle
employees is compromised East situation.
this could result The Group retains
in serious injuries and encourages an
or fatalities. open communication
policy with all employees
including discussions
regarding their welfare
and wellbeing.
----------------------------- ---------------------------- ------------------------------- --------------
20. Labour availability and wage inflation - Brexit
------------------------------------------------------------------------------------------------------------
Post-Brexit the UK With UK unemployment The Group continues New risk
may focus on enabling at historically low to recruit and train
higher-skilled migration levels, any reductions staff across all levels
into the UK and potentially in labour availability of the business, being
introducing a more may adversely impact an 'employer of choice'
restrictive policy operations. aiding staff recruitment
on lower-skilled Further, increased and retention. All
migration. demand for a limited our competitors face
labour pool may increase the same pressures
salary inflation not putting the Group
and adversely impact at a competitive disadvantage.
the Group's financial
results.
----------------------------- ---------------------------- ------------------------------- --------------
2. DIRECTORS' RESPONSIBILITY STATEMENT
The 2018 Annual Report contains the following statements regarding responsibility for the financial statements in compliance with DTR 4.1.12.
Each of the directors confirms that, to the best of their knowledge:
the Group's consolidated financial statements, prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;
the Strategic Report and the Directors' Report include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy.
The Directors of Polypipe Group plc are listed in the 2018 Annual Report, and on the Company's website: https://investors.polypipe.com/about-us/board-of-directors/
Enquiries:
Polypipe Martin Payne, Chief Executive Officer Paul James, Chief Financial Officer +44 (0) 1709 770 000
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
ACSEASLSFFKNEFF
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April 15, 2019 11:20 ET (15:20 GMT)
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