Eurocell Reports 'Robust' Financial Results in Half-Year

The market-leading, vertically integrated UK manufacturer, distributor and recycler of innovative window, door and roofline PVC products, Eurocell, has reported on trading for the six months ended 30th June 2019.

Financial and Operational Highlights

·    Strong sales growth of 15% (10% on a like-for-like⁽⁴⁾ basis)

·    Gross margin up 110bps, reflecting selling price increases and higher usage of recycled material

·    Overheads up 14% on a like-for-like basis⁽⁴⁾, reflecting direct labour from higher production volumes

·    EBITDA up 4% (pre-IFRS 16)

·    Good progress with planned actions to improve operational efficiency

-     On track with investment in extrusion capacity - all new lines to be operational by the end of Q3

-     Investment in recycling capacity at Ecoplas now well advanced

-     Mark Hemming appointed Chief Operating Officer - joins the business in August

·   Stock build programme implemented to protect against Brexit-related raw material supply interruption, with c.£3 million added to finished goods in H1 2019

·   Pre-IFRS 16 net debt £36.7m (December 2018: £23.5m) includes substantially increased capital expenditure, stock build and the impact of growth 

Mark Kelly, Chief Executive of Eurocell plc said:

"We have reported robust financial results for the first half and delivered another period of strong sales growth, albeit against weaker comparatives after bad weather in the early part of 2018. Higher EBITDA includes the benefit of selling price increases and continued growth in our use of recycled material.

"We have made good progress with our plans to improve operations. These include strengthening operational teams and implementing a substantial capital investment programme to increase production capacity. Our focus for 2019 remains on delivering further improvements in operating efficiency as these plans progress through the second half.

"As a result, whilst we are mindful of macroeconomic and political uncertainty, our expectations for the full year are unchanged."

 Source : Insight DIY Team and Eurocell

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