Flooding and project delays cause profit setback at Polypipe
In a trading update for the year to 31 October, Polypipe has cited project delays and flooding and poor ground conditions as main contributors of lower profits
The trading update from Polypipe revealed a “resilient performance in tough markets with group revenue 4.3% higher at £381.7m.”
Polypipe said its trading in the last four months reflected strong 2018 comparatives and short term political and economic uncertainty, with group revenue 1.7% higher than the prior year.
Since the end of October, Polypipe says its revenue has been exacerbated by flooding and poor ground conditions, most notably in the North and the Midlands, meaning contractors and developers have not been able to access sites for civils and groundworks activities.
Due to this, the board expects underlying operating profit for the year to be just below its previous expectations.
Manthorpe Building Products, which was acquired in October 2018, continues to perform ahead of expectations and the integration programme remains on track to be completed by the end of the year.
The commercial and infrastructure systems segment saw revenue decline by 5.8% in the four months ended 31 October 2019. Trading became tougher in this period with performance impacted by increased project delays in the UK commercial construction sector as political and economic uncertainty impacted investment decisions.
Martin Payne, chief executive officer at Polypipe, said: “Despite increasingly challenging market conditions and the impact of the recent severe weather, we still expect to report good growth in profits, albeit just below our previous expectations.
“Fundamentals in the group’s markets remain strong, with a structural housing shortage, historically low-interest rates, real wage growth and near full employment which means that we view our future prospects with confidence.”