Polypipe

LN: PLP

£953.6m market cap

476.8p 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

Polypipe’s H119 results showed good progress overall with price increases and acquisition contributions together more than offsetting some market challenges including merchant de-stocking during Q2. Underlying PBT, EPS and DPS were all ahead y-o-y in the 8–9% range. The highly complementary £14m acquisition of Alderburgh expands Polypipe’s stormwater management portfolio offering, adding design and installation capabilities also. The earnings impact is modest (+1–2% in a full year) but this serves as a further strengthening of Polypipe’s market position in the relatively robust infrastructure segment.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 411.7 88.3 65.7 26.9 17.7 11.9
2018A 433.2 90.6 67.1 28.1 17.0 10.5
2019E 460.5 102.8 73.8 30.0 15.9 10.4
2020E 488.4 107.6 77.8 31.6 15.1 9.1
Industry outlook

The Construction Products Association’s summer estimates project a modest contraction overall in output from the UK construction sector in 2019 and modest growth in the following two years. Infrastructure is expected to be the strongest segment, with new housebuilding and RMI seeing marginal 2019 declines with commercial building activity lower.

Last updated on 15/11/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 160.5
Forecast gearing ratio (%) 44
Price performance
%
1m
3m
12m
Actual 7.1 25.7 28.2
Relative* 5.7 20.6 22.6
52-week high/low 477.0p/312.8p
*% relative to local index
Key management
Martin Payne CEO
Paul James CFO