Source - Alliance News

Eurocell PLC on Tuesday said profit and revenue fell in its first half, and deteriorating market conditions have driven full-year guidance below its expectations in July.

The stock was down 6.2% at 105.50 pence on Tuesday around midday in London.

The Alfreton, England-based window, door and roofline PVC products manufacturer said pretax profit for the first half of 2023 fell 12% to £3.5 million, from £15.7 million the year before.

Revenue decreased 2.3% to £184.4 million from £188.8 million, while basic earnings per share were down 9.0% to 2.6 pence from 11.6p.

Administrative expenses increased to £67.4 million from £66.7 million. The cost of sales increased to £99.6 million from £93.0 million.

Eurocell said the profit decline was ‘as expected,’ and cited a punishing economic backdrop with a ‘particularly severe decline in new build housing.’ Chief Executive Darren Waters said market conditions ‘became more challenging than we had anticipated’.

However, Eurocell said it took ‘early and decisive action’ to reduce its operating costs, with a restructuring in the fourth quarter expected to save the firm £5 million per annum.

Net cash from operating activities was up 2.8% to £20.9 million from £18.1 million, while net debt meanwhile fell by 3.9% to £75.8 million from £71.9 million.

Eurocell also declared a 2.0p per share dividend for the period, down from 3.5p the prior year.

Looking ahead, the company noted ‘further deterioration’ in market conditions since July, causing it to anticipate a full-year performance below market expectations.

However, it said its cost control measures should leave it well-positioned for when markets recover, with efficient inventory management allowing it to maintain a strong balance sheet.

Waters commented: ‘Looking further ahead, the UK construction market continues to have attractive medium and long-term growth prospects, driven by the structural deficit in new build housing and an ageing housing stock that requires increased repair and maintenance.

‘Overall, I believe the actions we are now taking leave the business well positioned to benefit from a recovery in our markets which will, over the medium-term, drive sustainable growth in shareholder value.’

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