TIDMECEL
RNS Number : 4510Y
Eurocell plc
13 May 2021
13 May 2021
EUROCELL PLC
("Eurocell" or the "Group")
AGM Trading Update - Strong First Four Months
Eurocell plc, the market leading, vertically integrated UK
manufacturer, recycler and distributor of innovative window, door
and roofline PVC products, provides the following update for the
first four months of 2021, in advance of the Annual General Meeting
at 3pm today(1) .
Summary
We are pleased to report that, following the good start we made
in the first two months of the year, trading continued to improve
through March and April. Group like-for-like(2) sales for the four
months to 30 April 2021 were up 20% compared to 2019 and 26%
compared to 2020.
As a result of stronger than anticipated sales for March and
April, and an improved outlook for the first half, we now expect
profit before tax for the full year 2021 will be ahead of current
market expectations(3) .
Trading Performance
Sales growth rates for the four months to 30 April were as
follows:
Sales growth 2021 vs 2021 vs
2019 2020
Reported
Total Group 23% 75%
Like-for-like(2)
Total Group 20% 26%
Profiles Division 17% 24%
Building Plastics Division 23% 28%
-------- --------
This encouraging start to the year has been underpinned by
strong demand in the repair, maintenance and improvement (RMI)
market. Furthermore, we believe we are also continuing to take
market share. Group like-for-like(2) sales growth to 30 April of
20% compared to 2019 includes:
-- Profiles up 17% - good contributions from trade fabricators,
who are substantially focused on the RMI market, and a very strong
performance from Vista doors. New build has also enjoyed a good
start, with increasing housing market activity supported by ongoing
Government incentives and continued high levels of mortgage
approvals and demand
-- Building Plastics up 23% - strong performance across our full
range of own-manufactured products and traded goods. We previously
announced our intention to open up to 12 new branches this year.
Sites for all 12 have been identified, 4 of which are the new
larger format. We expect 3 to be open by 30 June, with the
remaining 9 to follow in H2
Group sales growth compared to both 2019 and 2020 includes
approximately 2% from selling price increases and a resin price
surcharge, implemented during February and April 2021 respectively,
to mitigate raw material price inflation (see below).
Reported Group sales growth of 75% compared to 2020 reflects the
impact of the closure of our business from 23 March to mid-May last
year, resulting in only 58 trading days, compared to 83 in
2021.
Raw Material Supply Chain
Strong demand in our markets has put sector supply chains under
pressure. We are experiencing tighter supply and an increasingly
inflationary environment, with prices of certain raw materials,
particularly PVC resin, rising significantly in 2021.
To date we have secured the raw materials we require and we are
mitigating cost inflation with selling price increases, and for
resin, a surcharge adjusted monthly in response to price changes.
Higher resin costs are also partially offset by our market-leading
recycling plants, which supplied 25% of our raw material
consumption in 2020.
New Warehouse
Fit-out of our new state-of-the-art warehouse is proceeding to
plan. After successfully beginning commercial operations from the
new site in January for the Profiles division, we achieved a second
major milestone with the transition of Building Plastics in April.
The final stages are expected to complete in Q2 and we expect
customer service levels to improve further as the new plant,
systems and processes become embedded. As well as being central to
increasing capacity, the new warehouse is key to delivering
anticipated improvements in operational efficiencies.
Outlook
The short-term outlook for the first half has improved which,
combined with our increasing confidence in the strength of our
markets, has led to an improvement in our full year expectations.
Nevertheless, we continue to take a cautious view of H2, driven by
raw material supply chain risks and limited visibility of consumer
spending patterns following the pandemic.
COVID-19 Update
We have maintained a good health and safety performance, with
safe working practices for COVID-19 operating well across the
business. In line with UK Government guidance, our manufacturing
plants, branch network, distribution and recycling operations have
all remained open throughout 2021.
Notice of Results
We will announce our half year results for the six months ending
30 June 2021 on 3 September 2021.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Notes
(1) The 2021 Annual General Meeting will be held at 3pm today at
Eurocell Head Office and Distribution Centre, High View Road,
Alfreton, Derbyshire, DE55 2DT. As previously announced, and in
line with Government guidance in relation to COVID-19,
shareholders, proxies and other attendees will not be permitted to
attend the AGM in person and shareholders have been strongly
advised to vote by proxy. A facility to ask the directors questions
by email was made available. Answers will be published, in due
course, on the Company's website: www.eurocell.co.uk .
(2) Like-for-like excludes acquisitions and new branches opened
in 2019/20/21, and is calculated by comparing average sales per
trading day for the period 1 January to 30 April in each year (i.e.
83 days in 2021 and 2019, and 58 days in 2020, which excludes days
closed due to the first COVID-19 lockdown).
(3) Eurocell calculated analyst consensus profit before tax forecast for 2021 of GBP20.5 million.
Enquiries:
Eurocell plc
Mark Kelly, Chief Executive Officer
+44 (0) 1773 842 105
Michael Scott, Chief Financial Officer
+44 (0) 1773 842 140
Teneo
Ben Foster
+44 (0) 777 624 0806
END
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