A muscular set of full-year results from pipe and drainage specialist Polypipe (PLP) is failing to offset the effects of a general market decline and shares in the £640.9 million cap are down 1.3% at 320.1p.

Doncaster-headquartered Polypipe reported that its pre-tax profit had more than doubled in 2015 on the back of rising sales in its UK operations.

Chief executive David Hall characterised 2015 as 'a record performance and another year of excellent progress for the group' after posting a pre-tax profit of £41.5 million for the year ended December 31, from £16.9 million the previous year.


While group revenue rose only 8.0% to £352.9 million, finance and administration expenses were trimmed back significantly in the year to the end of December 2015. Finance costs fell to £8.0 million from £17.5 million while savings to administration costs came in at around £6 million.

The August 2015 acquisition of the Nuaire ventilation business – already successfully integrated – illustrates the type of bolt-on deals the firm continues to seek out.

Founded in 1980 the company is one of Europe’s leading manufacturers of plastic piping. After a 14-year absence it returned to the stock market in April 2014.

The ongoing disappointing performance of the UK's RMI (Renovation, Maintenance & Improvement) market remains a concern but Deutsche Bank remains a buyer of the stock.

'We believe the potentially improving RMI outlook may provide scope for future upside surprise. Trading at 12.5x 2017E PE, we believe the stock is too cheap given its double digit earnings growth and strong cash generation profile.'

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Issue Date: 31 Mar 2016