Polypipe

LN: PLP

£799.2m market cap

400p last close

Polypipe is a leading European supplier of plastic building products and ventilation systems. UK operations address a broad range of sectors including residential, commercial and civil building demand and a number of subsectors within them.

Investment summary

A ten-month trading update (to end October) indicated that like-for-like revenue growth in the first four months of H2 was ahead of that seen in H1 as a whole in both of Polypipe’s reporting divisions. The comparable figures for Residential Systems are +5.5% H1, +11.5% H2 to date, +8.1% ytd and for Commercial & Infrastructure (C&I) -6.9% H1, +8.6% H2 to date, -0.6% ytd. Both divisions saw some impact from a period of bad weather in H1, so there is likely to be an element of rebound in the latest data but there has also been a clear pick up in C&I activity levels. The acquisitions of Manthorpe and Permavoid will add to underlying business momentum and the renewal of group debt facilities is a logical follow-on from these deals. Our estimates are under review. FY18 results are due to be released on 19 March.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2016A 387.2 84.5 60.9 24.6 16.3 10.0
2017A 411.7 88.3 65.7 26.9 14.9 9.0
2018E 433.0 92.9 70.1 28.7 13.9 8.5
2019E 443.5 96.4 73.6 30.1 13.3 N/A
Last updated on 21/03/2019
Industry outlook

Construction Products Association estimates currently project modest overall growth in output from the UK construction sector in 2019. Private housebuilding is expected to continue to grow while commercial building activity is currently expected to be lower.

Last updated on 21/03/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 82.1
Forecast gearing ratio (%) 23
Price performance
%
1m
3m
12m
Actual (2.1) 23.0 8.2
Relative* (4.3) 12.2 4.8
52-week high/low 432.6p/307.8p
*% relative to local index
Key management
Martin Payne CEO
Paul James CFO