Eurocell Performance 'Resilient'; Profit Up On Lower Sales

• Profits in line with expectations; Alunet acquisition in 2025 strengthens market position 

Eurocell plc, the market leading, vertically integrated UK manufacturer, distributor and recycler of innovative window, door and roofline products, today announces its preliminary results for the year ended 31 December 2024.

Highlights

• Adjusted PBT up 32% on lower sales, driven by proactive gross margin management and reduced input costs 
  
  
• Good progress with early stages of five-year strategy and remain well positioned for when markets recover
  
  
• Driving shareholder returns through a combination of a progressive ordinary dividend and share buybacks, with a new buyback of up to £5 million launched today
  
  
• Continuing focus on cost reduction, operational improvements and cash flow management
  
  
• Alunet acquisition in March 2025 is a compelling strategic fit  

Resilient financial performance 

• Group sales 2% below 2023, with volumes down 1%, driven by:
  
  - Profiles sales down 6%: reduced RMI (3) activity and a continuing weak new build housing market
  
  - Branch Network sales up 1%: although general RMI volumes were down, overall sales were up, reflecting the initial benefits of progress with strategic initiatives for garden rooms, windows, doors and e-commerce activity 
  
  
• Adjusted profit before tax up 32% vs 2023
  
  - Proactive gross margin management combined with the benefit of lower input costs
  
  - Partially offset by lower sales volumes and competitive pressure on selling prices in the branches
  
  - Continued labour and other overhead cost inflation
  
  - Targeted investment to generate momentum in strategic initiatives 
  
  
• Reported profit before tax up 18% vs 2023, after non-underlying items of £6.2 million (1)
  
  
• Continued focus on cash management, with net cash generated from operating activities of £44.2 million
  
  - Compares to net cash generated from operating activities of £52.8 million in 2023, which included a reduction in stocks of c.£13 million 
  
  
• Strong balance sheet, with pre-IFRS 16 net debt of £3.1 million (31 December 2023: net cash of £0.4 million) 
  
  
• Driving shareholder returns through a combination of a progressive ordinary dividend and share buybacks
  
  - Proposed final dividend of 3.85 pence per share, resulting in total dividends for the year of 6.05 pence per share, up 10% (2023: 5.5 pence per share)
  
  - £15 million share buyback programme which commenced in January 2024 now complete and a new buyback of up to £5 million launched today

Good early progress with strategic initiatives 

• Branch network: 2 new branches opened in Q4 2024 and at least 7 planned for 2025
  
  
• Windows and doors sales initiative: 91 branches live on the programme at the end of 2024, with progressive roll-out across the remaining network in 2025
  
  
• Garden room sales: c.550 units sold in 2024 at a total value of £8.8 million (2023: c.300 units, £4.4 million)
  
  
• Digital growth: e-commerce sales increased to £4.7 million in 2024 (2023: £3.0 million)
  
  
• Business effectiveness: ongoing cost reduction and operational improvement programmes delivering annualised savings of at least £2 million
  
  
• ESG Leadership: strong on sustainability as the leading UK-based recycler of PVC windows, with the proportion of recycled material used in production maintained at 32% (2023: 32%) 

Acquisition of Alunet

• Announced in March 2025, for an initial consideration of £29 million on a debt/cash free basis, funded largely from the Group’s existing £75 million Revolving Credit Facility
  
  - Significantly strengthens our position in residential aluminium systems and composite doors and adds garage doors to our portfolio of home improvement products
  
  - Initial payment of £22 million and deferred consideration of £7 million payable in four annual instalments beginning in 2026, plus potential for performance related payments of up to £6 million over the same period
  
  - Expected to be accretive to the Group’s underlying earnings for 2025, and pro forma net debt is expected to be below 1.0x pre-IFRS 16 EBITDA at 31 December 2025 

Darren Waters, Chief Executive of Eurocell plc said:

“Our financial performance in 2024 was resilient, in the context of trading conditions that remained challenging. We delivered an increase of 32% in adjusted profit before tax, as we continued to proactively manage gross margin and benefited from a reduction in input cost pricing. Our cash generation was solid and our financial position remains strong, following completion of a £15 million share buyback programme.

“We invested to generate momentum with our strategy, and I am pleased with the good early progress we have made across a broad range of initiatives. The recent acquisition of Alunet is a compelling strategic fit for Eurocell: it addresses a growing trend towards aluminium fabrication across the fenestration sector, significantly strengthens our position in composite doors, and adds aluminium garage doors to our home improvement product portfolio.

“Demand in our core RMI market remains sluggish. We have seen some early signs of an improving picture in new build housing, albeit from a very low base. We will therefore continue to focus on cost reduction and operational improvements to drive efficiencies, to mitigate against the impact of a slower market recovery. We are confident in delivering another year of good progress in 2025, as we continue to execute on our growth strategy. The medium and long-term growth prospects for the UK construction market remain attractive and we are well positioned to drive sustainable growth in shareholder value.”

(1) Non-underlying items of £6.2 million in 2024 include £2.2 million of costs relating to strategic IT projects, including costs classified as an expense as they use cloud computing, a £3.2 million non-cash right-of-use asset impairment charge and £0.8 million of acquisition costs. Non-underlying items of £3.5 million in 2023 include restructuring costs of £2.7 million and strategic IT project costs of £0.8 million. 

(2) Net debt/cash is bank overdrafts, borrowings and lease liabilities less cash and cash equivalents. Pre-IFRS 16 net debt excludes lease liabilities and is provided as our financial covenants are measured on this basis.

(3) RMI is repair, maintenance and improvement. 

Source : Eurocell

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