Shares in building components supplier Tyman (TYMN) climbed 8% to a 10-year high of 458p after the company lifted its earnings guidance due to trading this year which it said was ‘strongly ahead of expectations’.
The firm said the positive trading momentum seen in the final quarter of 2020 had continued into 2021 across all three of its divisions, meaning full year operating earnings would be ‘above the top end of the current range of analyst expectations’ of £80 million to £85 million.
STRONG HOUSING MARKETS
Group revenues in the four months to the end of April were up 31% on a like-for-like basis on the same period last year, and up 14% like-for-like on the same period in 2019 which is more directly comparable.
All three divisions - North America, UK and Ireland, and International - are experiencing an acceleration in order growth thanks to strong residential construction and buoyant repair, maintenance and improvement or RMI markets, especially in the US and UK.
US single family housing starts are up 20% in the first quarter, while the UK March Markit/Construction purchasing managers’ index hit 61.7, the highest level since September 2014.
POSITIVE READ-ACROSS
The firm is working to increase production in order to satisfy the surge in demand, while at the same time making sure it has enough raw materials and covering any cost increases by raising its own prices. Investors will get a closer look at the firm at its capital markets day later this month.
The strength of the recovery from the pandemic has been felt by other building supplies companies. Howden Joinery (HWDN), the UK’s biggest kitchen maker, reported a 46% increase in same-depot sales in the first four months of this year compared with the same period last year and a 9% increase compared with 2019.
SIG (SHI), a leading supplier of insulation and roofing products in the UK and Europe, said this week that trading in March and April was ahead of management expectations thanks to the strength of the RMI market.
This all bodes well for leading plumbing supplies company Ferguson (FERG), which sells over half of its products into the North American residential market and reports its third quarter (January to April) results early next month.
