18 July 2024
The Alumasc Group
plc
("Alumasc", the "Group", or the "Company")
Full Year
Trading Update
Strong performance, with
profit ahead of market expectations
Alumasc, the sustainable building
products, systems and solutions group, provides a trading update
for the year ended 30 June 2024, ahead of publishing its FY24
results on 3 September 2024.
Highlights
- Significant
outperformance of UK construction markets, with overall organic
revenue growth of c.6.5%, reflecting further successful execution
of innovation and commercial initiatives
- Underlying
profit before tax ('UPBT')1 now expected to be at least
£12.6m, ahead of current market forecasts2 and the prior
year (£11.2m)
- Revenue,
operating margins and profit ahead of FY23 across all three
divisions, reflecting focus on growth initiatives and disciplined
cost management
- ARP
acquisition performing well, with good progress on integration and
scope to deliver significant synergies going forward
- Continued
investment in efficiency, capability and new product development,
supported by strong operating cash generation
- Strong
platform to deliver substantial shareholder value as commercial
market conditions improve
Full
year profitability ahead of market expectations
Despite continued macro-economic
uncertainty and demand headwinds in the majority of its commercial
markets, the Group grew revenues and profits in the second half of
FY24, while continuing to invest in strategic initiatives to
enhance future growth opportunities.
The Group expects organic revenue
growth for the year - excluding the contribution from ARP, acquired
in December 2023 - to be around 6.5%, significantly outperforming
the c.2% decline in overall UK construction
activity3.
Overall UK sales were robust,
reflecting further market share gains in the Building Envelope
division, following recent investments in sales resource and
sustainable roofing solutions; and a resilient performance at
Housebuilding Products, where new product launches offset the
reduction in demand from the sharp decline in new housing
starts.
The Water Management division saw
strong growth in export sales, following the investments made in
overseas sales representation. This mitigated some UK project
delays which impacted the division's domestic revenues. The export
sales growth was achieved despite the delay in call-offs on a
significant project at Chek Lap Kok airport in Hong
Kong.
The ARP business has performed very
well in the six months following its acquisition. Cross-selling
opportunities are being taken, and work is well underway to realise
the substantial purchasing synergies presented by the acquisition,
which will benefit the Group from FY25.
The Group has continued to be
effective in both its pricing and cost management initiatives. As a
result, the Group expects UPBT for the year ended 30 June 2024 to
be at least £12.6m, ahead of both current market
forecasts2 and the prior year (£11.2m).
Progress towards medium term strategic
targets
FY24 was another period of strong
execution across the Group despite the challenging demand backdrop
in the UK construction sector. This reflects the benefits of the
Group's consistent strategic focus and ongoing investments in
growth capability and efficiency.
Over the medium term, the Board
believes that the Group can generate significant further value,
which is reflected in its targets to generate organic revenue
growth ahead of underlying UK construction markets and achieve
operating margins of 15-20%.
FY24 represents a period of strong
delivery against these objectives and the Group would expect to
make further progress as market conditions improve.
Strategic investments supported by strong financial
position
Year end net bank debt (pre-IFRS 16)
is expected to be approximately £7m, representing a leverage
multiple of around 0.5x EBITDA. The Group has continued to invest
in efficiency, capability and new product development initiatives
which enhance its organic growth prospects, as well as inorganic
opportunities such as the acquisition of ARP.
The strength of the Group's
operating cash generation supports these investments while
maintaining a strong financial position with substantial capacity
for future investments.
Paul
Hooper, Chief Executive of Alumasc, commented:
"Against such a challenging commercial market backdrop, I am
delighted with the Group's strong performance, which is testament
to our robust business model and the significant progress we have
made in delivering against our strategic aims.
"We are optimistic that our growth strategy, with a focus on
environmentally sustainable solutions, new product development,
investment in capability and ongoing self-help initiatives will
drive further strong growth in returns as market conditions
improve."
1 Underlying profit before tax ('UPBT') is calculated before
amortisation of acquired intangible assets, IAS19 pension costs,
and acquisition and restructuring costs.
2 The Board understands current market UPBT forecasts for the
year ending 30 June 2024 to be in the range of £11.7m to £12.1m,
with a consensus of £11.9m.
3 Source: CPA Construction Industry Spring 2024 Forecast for the
year to December 2024.
Certain information contained in
this announcement would have constituted inside information (as
defined by Article 7 of Regulation (EU) No 596/2014), as it forms
part of domestic law by virtue of the European Union (Withdrawal)
Act 2018) ("MAR") prior to its release as part of this announcement
and is disclosed in accordance with the Company's obligations under
Article 17 of those Regulations. The person responsible for making
this announcement on behalf of the Company is Helen Ashton, Group
Company Secretary.
END
Enquiries:
The Alumasc Group plc
Paul Hooper (Chief Executive)
+44 (0)1536 383844
Simon Dray (Group Finance
Director)
Peel Hunt
(Broker)
Mike
Bell
+44 (0)207 418 8831
Ed Allsopp
Cavendish (Nominated Adviser)
Julian
Blunt
+44 (0)207 908 6000
Edward
Whiley
Camarco (Financial PR)
Ginny Pulbrook
+44 (0)203 757 4992
Rosie
Driscoll
+44 (0)203 757 4991
alumasc@camarco.co.uk
LEI: 2138002MV11VKZFJ4359
The Alumasc Group plc
Burton Latimer, Kettering, Northants NN15 5JP
About Alumasc:
Alumasc is a UK-based supplier of
premium building products, systems and solutions. Almost 80% of
group sales are driven by building regulations and specifications
(developers/housebuilders, architects and structural engineers)
because of the performance characteristics offered.
The Group has three business
segments with strong positions and brands in their individual
markets. The three segments are: Building Envelope; Water
Management; and Housebuilding Products.