AGM Trading Update and Board Update

RNS Number : 2406L

Eurocell plc

12 May 2022

 

12 May 2022

EUROCELL PLC

("Eurocell" or the "Group")

AGM Trading Update and Board Update - Trading in Line with Expectations

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 2022, in advance of the Annual General Meeting later today.

Trading Performance

We have made a positive start to the year, supported by good underlying demand in our markets. Sales growth rates for the four months to 30 April 2022 were as follows:

Sales growth	vs 2021	vs 2019
Total Group	13%	39%
Profiles Division	18%	38%
Building Plastics Division	10%	39%

The repair, maintenance and improvement (RMI) market remains robust and we have kept pace with an exceptionally strong comparative period. Current indications are that RMI demand includes a greater emphasis on project specific work, rather than the higher levels of maintenance activity experienced last year. We believe we are continuing to take market share and have made substantial progress compared to the equivalent period of 2019.

Sales growth to 30 April compared to 2021 includes: 

•	Profiles - a good start in new build, where competitor fabricator weakness has supported our sales. Mortgages remain affordable and wage growth assists increased mortgage capacity. Vista doors has also reported another very strong performance
•	Building Plastics - good demand for high value project work (such as our roof lanterns, conservatory roofs and bi-fold doors) and our outdoor living range (fencing, decking and garden rooms), where sales are being supported by elevated levels of consumer savings and changing lifestyle patterns, such as hybrid working

We continue to take effective action to offset ongoing input cost inflation with a dynamic approach to selling price increases and surcharges. Price therefore remains a key driver of sales growth, but we believe resin costs have now plateaued.

Higher resin costs are also partially offset by our market-leading recycling plants. So far this year, these plants have supplied 27% of our raw material consumption (full year 2021: 27%), driving significant cost and carbon savings compared to the use of virgin material.

As a result of these factors, and notwithstanding uncertainty over how the macroeconomic backdrop may impact future demand, we continue to trade in line with expectations.

Reflecting the impact of COVID-19 on the RMI market, as well as supply chain disruption in the second half last year, 2021 sales volume and profit generation was weighted towards H1. We anticipate a more balanced result this year.  

Refinancing

In May, we completed a refinancing of our £75 million unsecured, sustainable revolving credit facility. The new facility is competitively priced, with key terms unchanged from the existing arrangements. In terms of sustainability, modest adjustments to the margin will be applied based on our achievement against ambitious annual recycling, emissions, and waste reduction targets. The facility matures in 2026 and includes an option to extend for an additional year.

Chair Designate Appointment

Following a comprehensive search process, led by our Senior Independent Non-executive Director Frank Nelson, we are delighted to announce that the Board has appointed Derek Mapp as an independent Non-executive Director and Chair Designate of the Board, with effect from 16 May 2022. Derek will also become a member of the Nomination and Remuneration Committees from this date.

Following a handover period, Derek will assume the role of Chair of the Board, and Chair of the Nomination Committee from 1 July 2022, at which point Bob Lawson will retire.

Derek is an experienced Chair and brings a wealth of commercial and operational knowledge to the Group. He is currently the Non-executive Chair of Mitie Group plc. Previously, he was Chair of Informa plc from March 2008 until June 2021 and Chair of Huntsworth plc from December 2014 to March 2019. Prior to that, Derek was Chief Executive Officer of Tom Cobleigh plc, Chair of East Midlands Development Agency and Sport England. He has also served on a number of Government agencies and boards.

Mark Kelly, Chief Executive Officer, said:

"On behalf of the Board, I would like to thank Bob for his tremendous contribution to the development of Eurocell since our IPO in 2015 and for his valuable counsel and support throughout that period. We are delighted that Derek has accepted our invitation to join the Board and I am looking forward to working closely with him."

This announcement is made pursuant to LR 9.6.11R(3) of the Listing Rules and there are no further matters required by paragraphs 9.6.13R (1) to (6) of the Listing Rules to be disclosed in relation to Derek Mapp.

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Enquiries:

Eurocell plc

Mark Kelly, Chief Executive Officer  [phone]

Michael Scott, Chief Financial Officer  [phone]  

Teneo

Ben Foster                                                    [phone]

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