REG - Eurocell plc - PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DEC 2025
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RNS Number : 1989X Eurocell plc 19 March 2026
19 March 2026
EUROCELL PLC (Symbol: ECEL)
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2025
Resilient financial performance; Alunet acquisition performing strongly
Eurocell plc, the leading UK manufacturer and distributor of window and door
products to the trade, today announces its preliminary results for the year
ended 31 December 2025.
Highlights
· Adjusted operating profit up 6%, driven by a strong contribution from
Alunet (acquired in March 2025) and effective cost control, partially offset
by lower organic sales volumes, labour cost inflation and investment in
strategic initiatives
· Adjusted profit before tax down 5%, reflecting higher finance costs
following the Alunet acquisition
· Continuing focus on operational improvements, cost reduction and cash
flow management
· Further progress with five-year strategy
· Driving shareholder returns through a combination of ordinary
dividends and share buybacks, with total returns of £11.4 million for 2025
· Will Truman appointed Chief Executive Officer (CEO) on 9 February
2026
Key financial performance measures 2025 2024 Change
Revenue (£ million) 403.5 357.9 13%
Underlying measures ((1))
Adjusted operating profit (£ million) 24.1 22.8 6%
Adjusted profit before tax (£ million) 19.0 20.0 (5)%
Adjusted basic earnings per share (pence) 14.6 14.4 1%
Reported measures
Operating profit (£ million) 17.3 16.6 4%
Profit before tax (£ million) 12.2 13.8 (12)%
Basic earnings per share (pence) 9.5 9.8 (3)%
Total dividends per share for the year (pence) 6.4 6.1 5%
Capital investment (£ million) 12.5 10.3 21%
Net cash generated from operating activities (£ million) 48.4 44.2 10%
Net debt (£ million) ((2)) 98.2 62.5 (35.7)
Net debt, pre-IFRS 16 (£ million) ((2)) 22.1 3.1 (19.0)
Resilient financial performance
· Group sales 13% above 2024, or flat excluding Alunet, with organic
volumes 2% lower
· Profiles division sales up 1% on 2024, with volumes 2% lower,
reflecting reduced RMI ((3)) activity through our trade fabricators, partially
offset by some modest improvement in the new build housing market
· Branch Network division sales down 1% on 2024, with volumes 2% lower,
reflecting general Branch Network sales to the RMI market down 6%, offset by
further progress with our strategic initiatives (see below)
· Alunet post-acquisition sales of £46.7 million in the 10 months to
31 December 2025, representing growth of 28% over the corresponding March to
December period in 2024, driven by market share gains
· Adjusted operating profit up 6% vs 2024, reflecting a strong
contribution from Alunet and effective cost control, partially offset by:
- Lower organic sales volumes and competitive pressure on selling
prices in the branches
- Continued labour and other overhead cost inflation, including the
increases to employers' National Insurance and the National Living Wage from
April 2025
- Further targeted investment to maintain momentum in strategic
initiatives, including the new branch opening programme (see below)
· Reported operating profit up 4% vs 2024 and reported profit before
tax down 12%, after non-underlying items of £6.8 million ((1))
· Strong balance sheet, with pre-IFRS 16 net debt of £22.1 million
down from £29.0 million at 30 June 2025 (31 December 2024: £3.1 million),
representing leverage of 0.7x pre-IFRS 16 EBITDA ((4))
- Initial consideration for Alunet of c.£22m substantially funded
from debt facility
- Net cash generated from operating activities of £48.4 million up 10%
vs 2024, reflecting good cash management
· Driving shareholder returns through a combination of ordinary
dividends and share buybacks
- Interim dividend paid in October 2025 of 2.3 pence per share up 5%
(2024: 2.2 pence per share)
- Proposed final dividend of 4.1 pence per share (2024: 3.9 pence per
share), resulting in total dividends for the year of 6.4 pence per share
(2024: 6.1 pence per share), up 5% and totalling £6.4 million (2024: £6.2
million)
- £5 million buyback announced in March 2025 now complete
- Total returns announced for 2025 of £11.4 million (equivalent to a
yield ((5)) of c.8%), which followed total returns for 2024 of £21.2 million
(including a buyback of £15 million and equivalent to a yield of c.14%)
- Intend to continue share buybacks, assuming no prolonged impact from
the situation in the Middle East and subject to maintaining a strong financial
position
Progress with strategic initiatives
· New branches: 2 opened at the end of 2024 plus 7 new sites and 6
relocations completed in 2025
- Sales from new branches in 2025 of £3.3 million
- Creates a short-term profit drag (operating loss of £1.1 million in
2025), but drives longer-term profit growth
· Windows and doors: accelerated roll-out, with all 215 branches live
on the programme from July (90 live at the end of 2024), driving sales of
£30.3 million, up 12% on 2024 and up 26% on 2023, the base year for the
strategic plan
· Digital growth: e-commerce sales of £6.6 million, up 40% on 2024,
with a strong operating profit margin
· Garden rooms: sales of £9.6 million up 9% on 2024, with an improving
operating profit margin
· Business effectiveness: ongoing operational improvements and cost
reduction
- Previously announced programmes implemented in H1 2025, including
Branch Network restructuring, deliver annualised cost savings of c.£4 million
- Continuing project to modernise IT infrastructure, with transition to
new systems expected at the end of 2026
Derek Mapp, Chair of Eurocell plc said:
"Our financial performance in 2025 was resilient, in the context of trading
conditions that remained subdued. We delivered an increase of 6% in adjusted
operating profit despite lower organic volumes, thanks to a strong
contribution from Alunet and effective cost control. Our cash generation was
good and our financial position remains strong.
"We have continued to invest to maintain momentum with our strategy and we are
planning to deliver further progress in 2026. The acquisition of Alunet in
March is a compelling strategic fit for Eurocell and the business is
performing strongly under our ownership.
"Demand in the RMI market remains sluggish, and we are therefore continuing to
focus on operational improvements and cost control. The potential impact of
the evolving situation in the Middle East is difficult to assess at this time,
but the medium and long-term prospects for the UK construction market remain
attractive and we are well positioned to drive sustainable growth in
shareholder value.
"Finally, the recent appointment of Will Truman as CEO will bring both
valuable stability and an injection of pace, as we continue to progress our
strategy."
Will Truman, CEO of Eurocell plc said:
"I am delighted to be leading Eurocell. We have a strong business with a clear
strategy, and I look forward to working with the team to drive opportunities
and accelerate our growth."
Notes
(1) Non-underlying items of £6.8 million in 2025 comprise strategic IT
project costs of £4.2 million (including cloud computing and internal
resourcing costs), restructuring costs of £1.8 million, plus Alunet
acquisition and certain other costs of £0.8 million. Non-underlying items of
£6.2 million in 2024 include £2.2 million of strategic IT project costs, a
£3.2 million non-cash right-of-use asset impairment charge and £0.8 million
of Alunet acquisition costs.
(2) Net debt is bank overdrafts, borrowings, deferred consideration and
lease liabilities less cash and cash equivalents. Pre-IFRS 16 net debt
excludes lease liabilities and is provided as our financial covenants are
measured on this basis.
(3) RMI is repair, maintenance and improvement.
(4) Pre-IFRS 16 EBITDA is stated inclusive of operating lease rentals
under IAS 17 Leases.
(5) Yield calculated as total returns divided by average market
capitalisation for the year.
Analyst presentation
There will be an audiocast presentation for analysts and investors at 9am
today. The presentation can be accessed remotely via a live audiocast link as
follows: https://streamstudio.world-television.com/782-2007-43069/en
(https://url.uk.m.mimecastprotect.com/s/BGE-C87Nuzlmq7infVSyVpA1?domain=streamstudio.world-television.com)
Alternatively, you can join via conference call as follows:
Dial-in +44 203 481 4247
Toll free +44 800 260 6466
Conference ID: Eurocell Full Year Results 4912001
A copy of the presentation will be made available from 7am on 19 March on
the Group's website: https://investors.eurocell.co.uk/investors/
(https://investors.eurocell.co.uk/investors/)
Following the presentation, a recording of the audiocast will also be made
available on the Group's website (link above).
CHAIR'S STATEMENT
Introduction
Against a weak market backdrop, Eurocell delivered a resilient financial
performance for the year, with adjusted operating profit ahead of 2024.
The progress we are making in the business is testament to the commitment,
hard work and dedication of our teams in every part of the Group, and I would
like to offer, on behalf of the Board, my sincere thanks to them all.
Financial performance
Adjusted operating profit was up 6% at £24.1 million (2024: £22.8 million),
with the acquisition of Alunet and further progress with our strategic
initiatives offsetting the impact of weakening markets. Adjusted profit before
tax was down 5% at £19.0 million, reflecting higher interest costs on debt
arising following the acquisition.
The business continued to generate good cash flows, and the acquisition of
Alunet in March 2025 was funded primarily from our debt facility. Pre-IFRS 16
net debt at 31 December 2025 was £22.1 million, down from £29.0 million at
30 June 2025 (31 December 2024: £3.1 million). We have a strong balance sheet
and good headroom on our debt facility, which was refinanced in March 2026.
Capital allocation
In line with our strategy, significant investments in the next 12 months
include delivering the project to modernise our IT infrastructure, where we
expect transition at the end of 2026.
We are committed to driving shareholder returns through a combination of
ordinary dividends and supplementary distributions (currently via share
buybacks) where appropriate.
The £5 million share buyback announced in March 2025 is now complete. Our
intention remains to continue share buybacks, assuming no prolonged impact
from the situation in the Middle East and subject to maintaining a strong
financial position.
We paid an interim dividend in October 2025 of 2.3 pence per share, up 5% on
the prior year (2024: 2.2 pence per share). The Board proposes a final
dividend of 4.1 pence per share (2024: 3.9 pence per share), which results in
total dividends for the year of 6.4 pence per share (2024: 6.1 pence per
share), up 5% and totalling £6.4 million (2024: £6.2 million). Total returns
announced for 2025 are therefore £11.4 million, equivalent to a yield of
c.8%. This follows total returns for 2024 of £21.2 million (including a
buyback of £15 million), equivalent to a yield of c.14%.
Strategy and acquisition of Alunet
Alunet is a highly complementary acquisition and a good strategic fit for
Eurocell, reflecting the growth of aluminium fabrication for windows and
doors. The acquisition enhances our leadership position in fenestration by
expanding the Group's aluminium offering, with a wider range of products and
ownership of our own aluminium system, and also improves our offering in
composite doors. The Alunet team has strengthened the Group's management and I
was delighted to welcome all 200 Alunet employees to the Eurocell Group in
March.
Our strategy, launched at the beginning of 2024, identifies an ambitious
pathway to building a £500 million revenue, £50 million operating profit
business, generating a 10% operating profit margin, over a five-year period.
We have made further progress with our strategic initiatives, but reported
financial results so far have been below our original projections, impacted by
weakening demand. However, with a strong contribution from Alunet, we are
confident that our targets remain achievable, although the timing and pace of
market recovery will continue to be a factor in determining when we achieve
our goals.
The Business Review includes an update on progress with our key strategic
initiatives.
Board changes and governance
As previously announced, Darren Waters stepped down as Chief Executive Officer
(CEO) on 9 February 2026. The Board's view is that to achieve our strategic
objectives in this critical year, it is in the best interests of the Company
to have surety of strong leadership and a seamless handover, and therefore
Will Truman was appointed as CEO with immediate effect.
Will was CEO at Imagesound for 9 years up to April 2023, having served as
Chief Financial Officer (CFO) for 7 years prior to that. Previously, he was an
Associate Director within Transaction Services at KPMG. I am pleased that Will
has agreed to step into this role. Having served on our Board as a
Non-executive Director since 2023, he has a deep understanding of the Group,
its culture, and its strategic objectives. The Board is confident Will's
appointment will bring both valuable stability and an injection of pace, as we
continue to progress our strategy.
Will vacated his role as CFO Designate and we are grateful that Michael Scott
has agreed to postpone his previously announced retirement and continue as
CFO, whilst the Board completes a full and rigorous recruitment process to
identify a permanent CFO for the business.
In order to balance the workload across our Non-executive Directors, Angela
Rushforth will take over as Chair of the Remuneration Committee from Alison
Littley, with effect from the AGM on 14 May 2026. Alison will continue in her
position as Senior Independent Non-executive Director and Chair of the Social
Values and ESG Committee.
Finally, I can confirm that as a Board, we are committed to the highest
standards of corporate governance and ensuring effective communication with
shareholders.
Derek Mapp
Chair
BUSINESS REVIEW
INTRODUCTION
Trading conditions remained subdued in 2025, with challenging macroeconomic
conditions and weak consumer confidence continuing to impact demand in both
the repair, maintenance and improvement market (RMI) and new build housing.
These trends were compounded in the fourth quarter of the year, with
increasing uncertainty over the Autumn Budget announcements driving a further
slowdown in activity.
Group revenues for 2025 were up year-on-year, enhanced by the acquisition of
Alunet in March, which continues to perform strongly. Organic revenues for the
year were level with 2024 and include further progress with our growth
strategy, which we are pleased to see coming through in the sales performance
of our key initiatives.
We have faced ongoing competitive pressure on selling prices in the branches,
as well as overhead cost inflation across the business. Our focus remains on
further operational improvements and cost reduction initiatives to drive
greater efficiencies and to mitigate against the impact of weaker markets. We
are also driving opportunities to accelerate the pace of execution across our
strategic initiatives.
Further details of our financial and operating performance, together with an
update on the progress with implementation of our five-year strategy,
including the acquisition of Alunet, are set out below.
FINANCIAL RESULTS
Sales for the year were £403.5 million, up 13% on 2024, or flat excluding
Alunet, with organic volumes 2% lower. In the organic business, lower
underlying volumes were partially offset by further progress with our
strategic initiatives, including window and door sales, new branches,
e-commerce activity and garden rooms. At Alunet, market share gains have
driven strong sales growth.
Adjusted operating profit was £24.1 million, up 6% on 2024. This reflects a
strong contribution from Alunet and effective cost control, partially offset
by lower organic volumes, competitive pressure on selling prices in the
branches, labour cost inflation and further investment in our strategic
initiatives.
Net cash generated from operations was £48.4 million, up 10% on 2024,
reflecting our continued focus on cash management.
Further information on our financial performance is included in the Chief
Financial Officer's Review.
OPERATIONAL PERFORMANCE
Production
Extrusion performance was consistent throughout 2025 and the level of output
stable, benefiting from process improvements and increased preventative
maintenance. We have a programme of initiatives to drive further operational
improvements (see Business Effectiveness below) and we expect these benefits
to begin to materialise in 2026, and thereafter as volumes increase.
Recycling
We are the leading UK-based recycler of PVC windows, saving the equivalent of
c.3 million window frames from landfill each year. Our use of recycled
materials in production remains substantial at 30%, driving lower carbon
emissions and typically reducing costs through the cycle, compared to the use
of virgin material. A slight decrease on 2024 (32% usage) reflects product mix
and lower volumes, as well as some unscheduled plant downtime caused by
equipment breakdowns. We have increased our programme of preventative
maintenance in the recycling facilities to reduce the risk of future
breakdowns.
To further improve the effectiveness of our recycling operations, in February
2026 we began a project to consolidate our two recycling plants onto the
existing facility at Ilkeston (see Business Effectiveness below).
Recycling feedstock purchase prices have remained stable, reflecting the
action we have taken to secure additional cost-effective sources of supply.
Health and safety
The safety and well-being of our employees, contractors and branch customers
is our number one priority.
Following improved safety results in 2024, our Lost Time Injury Frequency Rate
('LTIFR') slipped back to 6.4 in 2025 (2024: 4.1). In the light of these
results, we have made some changes to health and safety leadership and our
approach. A new Head of Safety, Health, Environment and Quality ('SHEQ')
joined the business in Q4 and has led the development of an improved health
and safety plan, focussing on the behaviours that will drive a more proactive
safety culture across the Group.
In addition, following the acquisition, we have ensured critical health and
safety policies and controls are in place across the Alunet businesses.
STRATEGY
At the beginning of 2024 we launched our ambitious strategy, which reset our
objectives for the business. We identified a pathway to building a £500
million revenue, £50 million operating profit business, generating a 10%
operating margin, over the five-year period to December 2028. Our strategy is
built around four pillars: Customer Growth, Business Effectiveness, People
First and ESG Leadership. The following paragraphs summarise these pillars and
our progress with the initiatives which support them.
When we launched the strategy, a modest but sustained recovery in our core
markets was generally anticipated for the earlier years of our five-year plan.
However, trading conditions have in fact deteriorated since then and remain
weak. As a result, whilst we have made progress with our strategic
initiatives, overall sales and operating profits reported to date have been
below our original projections. We are therefore now driving opportunities to
accelerate the pace of execution on our growth strategy and we are confident
that, whilst ambitious, these financial targets remain achievable, with the
Alunet acquisition providing a significant offset to continued market
weakness. However, the timing of market recovery and the pace at which demand
picks-up will continue to be a factor in determining when we achieve our
goals.
Customer Growth
Our aim is to become the trade customer's preferred choice in all markets and
segments where we operate. We believe the biggest opportunity for growth is
expansion of the Branch Network, including opening new branches and
significantly increasing the sale of windows and doors, underpinned by
investment in digital marketing, to raise awareness of our products and home
improvement solutions and acquire new customers.
Branch Network
We estimate that the optimum Branch Network size is at least 250 sites, which
was confirmed through modelling and analysis work with our location planning
partner. This work identified an additional c.50 priority locations.
We opened 2 branches in Q4 2024, followed by 7 in 2025, primarily in the South
of England, delivering incremental sales of £3.3 million in 2025. We now have
215 sites in operation and plan to add c.30 new sites over the next three to
four years, including at least 5 in 2026.
We are supplementing the opening programme with several branch relocations,
where the current site is sub-optimal in terms of size or location, and
therefore a constraint to our growth objectives. Following 2 site relocations
in 2024, we completed another 6 in 2025.
New branches and relocations include a refreshed branch exterior, an improved
interior layout and are supported with strong pre-opening recruitment and
marketing campaigns. This programme therefore creates a short-term operating
profit drag (£1.1 million in 2025), but drives longer-term profit growth.
Windows and doors
Following encouraging early results with our initiative to sell more windows
and doors through the network, we accelerated the site roll-out in 2025. All
215 branches were live on the programme by July (90 live at the end of 2024),
driving sales of £30.3 million, up 12% (£3.3 million) on 2024 and up 26%
(£6.2 million) on 2023, the base year for our strategic plan.
In addition, we have now built a national fabricator network across both
aluminium and PVC to service the branches, which exclusively sources bar
length material from Eurocell. The project provides incremental growth
opportunities for our fabricator partners, and we continue to work with them
to secure additional capacity.
Extended living spaces
Extended living comprises garden rooms and extensions. In 2025, we delivered
garden room sales of £9.6 million, up 9% on 2024, supported by the
introduction of four new designs. Extension sales were £1.2 million, compared
to £1.0 million in 2024.
Since launching these product ranges, we have delivered good sales growth, but
operating margins have been below our expectations, due to the cost of lead
generation, plus other selling and installation costs. Following a review in
H2 2025, we identified opportunities to increase garden room sales and margins
and capture further growth.
With extensions, our review determined that higher costs are typically driven
by more complex installations and we therefore concluded to exit this
initiative, on the basis that returns were unlikely to meet our target level.
Profiles (fabricators)
In Profiles, we believe we are now the leading supplier of rigid PVC profile
to the UK market. Our objective is to protect our existing business and
maintain our value-added service propositions that support customers. We will
continue to leverage our leading position with housebuilders and commercial
developers to ensure we maintain specifications to support a robust pipeline
of work for our fabricator customers. We are recognised across the industry as
the leading technical systems house and will continue to exploit this
advantage.
The windows and doors initiative also provides growth opportunities in
Profiles, as it pulls through increased profile sales via fabricator partners
and increased composite door sales through our entrance doors businesses.
As described below, the acquisition of Alunet in March 2025 complements our
proposition to fabricators, by providing a one-stop shop for PVC and aluminium
door and window systems. As a result, 14 Eurocell PVC fabricators have now
switched their aluminium requirements to Alunet.
Digital growth
We have an ambitious digital strategy to drive more relevant trade customer
traffic to our website, as well as build homeowner brand awareness.
We have invested to drive organic web traffic growth, increased our digital
paid media, improved our use of AI to support customer targeting and developed
our web proposition with initiatives such as one hour click-and-collect. As a
result, we have grown e-commerce sales to £6.6 million in 2025 (2024: £4.7
million), and we are confident that we will achieve more progress in 2026.
This investment has also attracted more new trade accounts to our branches,
with 11,596 new spending accounts added in 2025 (2024: 10,785), and driven
more homeowner leads to buy big ticket items.
Business Effectiveness
Our objective is to make Eurocell a lean and efficient business. We are
upgrading our business systems and streamlining structures and processes to
increase efficiency and improve customer experience. Given that the near-term
market outlook is likely to remain challenging, we are continuing to
prioritise operational improvements and cost reduction.
Continuous improvement, efficiencies and cost reduction
In April 2025, we restructured the Branch Network by removing a layer of
regional operational management, reducing the size of the salesforce and
closing a small number of underperforming branches, generating annualised cost
savings of c.£2 million.
In May 2025, we announced further overhead cost reductions, including
restructuring now completed in Operations and Shared Services, generating
annualised cost savings of c.£2 million.
In February 2026, to further improve the effectiveness of our recycling
operations, we began a project to consolidate our two recycling plants onto
the existing facility at Ilkeston. The project requires relocation of certain
critical equipment from the site at Selby, plus investment in the Ilkeston
plant to eliminate single points of failure, enhance the layout and improve
working conditions. We expect to cease operations at Selby and begin
processing at Ilkeston in H2 2026, with the Selby site exit to be concluded by
the end of the year. Capital investment is expected to be c.£2.6 million,
with annualised cost savings of c.£1.5 million running from 2027.
Non-underlying charges are expected to be in the region of £3 million,
including non-cash asset write downs of c.£1.5 million.
Systems replacement
As previously announced, we are in the process of replacing our Enterprise
Resource Planning ('ERP') system, including a new trade counter system in the
Branch Network.
The new trade counter system will transform the way we interact and transact
with customers in the branches, primarily through process simplification
(including electronic point-of-sale technology). The new ERP system will
support all other functions of the business and comes with built-in analytics
to facilitate data-driven decisions.
We expect to transition to the new systems at the end of 2026. Whilst a little
later than previously envisaged, we are confident in this timing, with total
non-underlying costs for the project now estimated at c.£13 million
(previously £10 million) over the 2024-2027 period. Associated capex costs
remain unchanged at c.£1 million.
People First
With People First, our objective is to make Eurocell a great place to work,
through a focus on health and safety, an enhanced employee value proposition,
improved levels of engagement and effective talent management.
For our employee value proposition, in 2025 we developed a much-improved
wellbeing framework and better induction and onboarding programmes. In 2026,
we will seek to better align and improve our reward and recognition
schemes.
On engagement, we launched the Eurocell Colleague Forum in 2025, to provide a
stronger link with senior leadership at local and national levels. Our 2025
externally administered employee engagement survey results demonstrate
progress in some areas, but also that more work on engagement is required.
Action plans responding to the survey findings are in progress, including
development of the Forum and simplification of processes (facilitated by the
new systems).
Effective talent management includes talent development, succession planning
and an increasing use of apprenticeships. We have launched a revised
apprenticeship offer and will begin a new leadership development framework in
2026, affiliated to the Institute of Leadership and Management.
ESG Leadership
Our ambition is to be a leading responsible company. Eurocell is already a
leader in PVC recycling, and looking ahead, we aim to excel in all areas of
ESG.
In 2024, we completed the work to determine a path to reach Net Zero by 2045.
In 2025, our targets were independently verified by the Science Based Targets
initiative ('SBTi') and we published our Transition Plan. We now intend to
progress decarbonisation initiatives in line with the Plan.
ACQUISITION OF ALUNET
In March 2025, we announced the acquisition of Alunet for consideration of
£29 million on a debt/cash free basis. The acquisition advances our strategy,
significantly strengthening the Group's position in residential aluminium
systems and composite doors, and adds aluminium garage doors to our portfolio
of home improvement products.
Alunet has grown rapidly since its establishment in 2013 and under Eurocell's
ownership we expect to leverage our leading market positions in new build,
trade fabrication and distribution, to help the business reach its full
potential.
In the post-acquisition period (10 months to 31 December 2025), Alunet
delivered sales of £46.7 million, up 28% over the corresponding period in
2024, with growth driven primarily by market share gains. Adjusted operating
profit in the post-acquisition period was £4.8 million, which is up £1.8
million on 2024.
We expect another year of good growth in 2026, driven by further market share
gains and new product introductions, alongside capturing group-wide synergies
and manufacturing efficiencies.
Full financial details of the transaction (including the potential for
additional performance-related payments) and trading performance are set out
in the Chief Financial Officer's Review.
SUMMARY AND OUTLOOK
Our financial performance in 2025 was resilient, in the context of trading
conditions that remained subdued. We delivered an increase of 6% in adjusted
operating profit despite lower organic volumes, thanks to a strong
contribution from Alunet and effective cost control. Our cash generation was
good and our financial position remains strong.
We have continued to invest to maintain momentum with our strategy and we are
planning to deliver further progress in 2026. The acquisition of Alunet in
March is a compelling strategic fit for Eurocell and the business is
performing strongly under our ownership.
Demand in the RMI market remains sluggish, and we are therefore continuing to
focus on operational improvements and cost control. The potential impact of
the evolving situation in the Middle East is difficult to assess at this time,
but the medium and long-term prospects for the UK construction market remain
attractive and we are well positioned to drive sustainable growth in
shareholder value.
CHIEF FINANCIAL OFFICER'S REVIEW
2025 2024
Underlying measures((1)) £m £m
Revenue 403.5 357.9
Gross profit 205.3 188.3
Gross margin (%) 50.9% 52.6%
Overheads (153.8) (140.2)
Adjusted((1)) EBITDA 51.5 48.1
Depreciation and amortisation (27.4) (25.3)
Adjusted((1)) operating profit 24.1 22.8
Finance costs (5.1) (2.8)
Adjusted((1)) profit before tax 19.0 20.0
Taxation (4.2) (4.6)
Adjusted((1)) profit after tax 14.8 15.4
Adjusted((1)) basic earnings per share (pence) 14.6 14.4
Reported measures
Non-underlying items (6.8) (6.2)
Tax on non-underlying items 1.6 1.3
Reported operating profit 17.3 16.6
Reported profit before tax 12.2 13.8
Reported profit after tax and profit for the year 9.6 10.5
Reported basic earnings per share (pence) 9.5 9.8
(1) See Alternative Performance Measures below.
INTRODUCTION
The weakening trends experienced at the start of the year in the RMI market
continued throughout 2025. Against this backdrop, we delivered a resilient
financial performance for the year.
Whilst organic sales volumes were below 2024, we have proactively managed our
gross margin and cost base to offset significant cost inflation and support
investment in our strategy. As a result, organic sales and gross margin for
the year were both level with 2024 and we reported only a small increase in
organic operating costs, despite significant inflationary pressure. Alunet has
performed well since the acquisition in March 2025, and is the key driver of
the Group's overall sales and adjusted operating profit increases for the
year.
We continue to focus on efficient working capital management and delivered
robust cash flow generation for the year. We retain a strong balance sheet
with good headroom on our debt facility, which was refinanced in March 2026.
We are committed to driving shareholder returns through a combination of
ordinary dividends and share buybacks, subject to maintaining a strong
financial position. Total returns announced for 2025 are £11.4 million,
equivalent to a yield of c.8%.
Since we launched our strategy at the beginning of 2024, our markets have been
weaker than anticipated. However, with a strong contribution from Alunet, we
are confident that our targets remain achievable, although the timing and pace
of market recovery will be a factor in determining when we achieve our goals.
REVENUE
Revenue for 2025 was £403.5 million, 13% above 2024 (£357.9 million), or
flat excluding Alunet, with organic volumes down 2%. In the period from the
acquisition at the beginning of March to 31 December 2025, Alunet added sales
of £46.7 million to the Group. In the organic business, lower underlying
volumes were partially offset by selling price increases and further progress
with our strategic initiatives. See Divisional Performance for further
information on revenues.
GROSS MARGIN
Gross margin was 50.9% in 2025, or 52.6% excluding Alunet (2024: 52.6%). In
the organic business, we implemented selling price increases to recover cost
inflation, although competition for limited demand continues to drive pressure
on selling prices in the Branch Network. However, we continued to proactively
manage our gross margin and secured stable input cost prices, including PVC
resin, recycling feedstock and electricity.
DISTRIBUTION COSTS AND ADMINISTRATIVE EXPENSES (OVERHEADS)
Underlying overheads for 2025 were £153.8 million, up 10% on 2024 (£140.2
million), or up 1% excluding Alunet, demonstrating effective cost control. We
have continued to experience cost inflation, particularly for labour, which
includes the increases to employers' National Insurance and the National
Living Wage from April 2025. Overheads also include targeted investment to
maintain momentum in our strategic initiatives, including the new branch
opening programme.
These increases were partially offset by the previously announced cost
savings, including the Branch Network restructuring completed in April 2025.
ALTERNATIVE PERFORMANCE MEASURES
Alternative performance measures are used alongside statutory measures to
facilitate a better understanding of financial performance and comparison with
prior periods, and in order to provide audited financial information against
which the Group's bank covenants, which are all measured on a pre-IFRS 16
basis, can be assessed.
Adjusted EBITDA, adjusted operating profit and adjusted profit before tax all
exclude non-underlying items. Adjusted profit after tax and adjusted earnings
per share exclude non-underlying items and the related tax effect. Pre-IFRS 16
EBITDA is stated inclusive of operating lease rentals under IAS 17 Leases.
Pre-IFRS 16 net debt is defined as total borrowings, deferred consideration
and lease liabilities less cash and cash equivalents, excluding the impact of
IFRS 16 Leases.
We classify some material items of income and expense as non-underlying when
the nature of the circumstances merit separate presentation. Alongside
statutory measures, this facilitates a better understanding of financial
performance and comparison with prior periods.
NON-UNDERLYING ITEMS
Non-underlying items for 2025 of £6.8 million comprise: strategic IT expenses
of £4.2 million, including cloud computing and internal resourcing costs,
which are expensed as incurred rather than capitalised as intangible assets;
restructuring costs of £1.8 million, being redundancy payments and related
employee benefit termination costs in connection with restructuring completed
in the year; plus Alunet acquisition and certain other costs of £0.8 million.
Non-underlying items of £6.2 million in 2024 include £2.2 million of
strategic IT project costs, a £3.2 million non-cash right-of-use asset
impairment charge plus £0.8 million of Alunet acquisition costs.
Our strategic IT projects comprise a new customer-facing website and an
employee management system (both completed in 2024) and, most significantly,
the replacement of our Enterprise Resource Planning ('ERP') system. Total
expected non-underlying costs for the system replacement are in the region of
£13 million over the 2024-27 period, with transition to the new systems
expected at the end of 2026. Non-underlying costs incurred on the project up
to 31 December 2025 are £6.4 million (comprised of the 2024 and 2025 costs
described above).
DIVISIONAL PERFORMANCE - PROFILES
2025 2024 Change
£m £m %
Third-party revenue 146.7 146.1 1%
Inter-segmental revenue 61.5 63.7 (3)%
Total revenue 208.2 209.8 (1)%
Adjusted((1)) operating profit 17.4 19.4 (10)%
Operating profit 14.0 14.6 (4)%
(1) Adjusted performance measures are stated before non-underlying items.
Profiles third-party revenue for the year was £146.7 million, 1% higher than
2024 with volume down 2%, reflecting reduced RMI activity through our trade
fabricators, partially offset by some modest improvement in the new build
housing market. Cost-of-living pressures, high interest rates and falling
house prices have all had a significant adverse effect on our end markets.
Profiles adjusted operating profit for 2025 of £17.4 million was 10% below
2024, reflecting lower sales volumes plus labour and other cost inflation,
with stable raw material and electricity costs.
Reported operating profit is stated after non-underlying costs of £3.4
million in 2025, comprised of strategic IT projects and restructuring costs.
Non-underlying costs of £4.8 million in 2024 included strategic IT projects,
a non-cash right-of-use asset impairment charge and acquisition expenses.
DIVISIONAL PERFORMANCE - BRANCH NETWORK
2025 2024 Change
£m £m %
Third-party revenue 210.1 211.8 (1)%
Inter-segmental revenue 0.4 0.5 (20)%
Total revenue 210.5 212.3 (1)%
Adjusted((1)) operating profit 3.4 6.5 (48)%
Operating profit 0.4 5.1 (92)%
(1) Adjusted performance measures are stated before non-underlying items.
Third-party revenues in the Branch Network for 2025 were £210.1 million, 1%
lower than 2024, with volume down 2%. This comprises general RMI volumes in
the Branch Network down 6%, with homeowners holding back on discretionary
expenditure against a backdrop of macroeconomic uncertainty, offset by the
benefits of progress with our strategic initiatives, including window and door
sales up 12%, garden rooms up 9% and e-commerce activity up 40%. New branches
added sales of £3.3 million in 2025.
Branch Network adjusted operating profit for 2025 was £3.4 million, 48% below
2024, reflecting competitive pressure on selling prices in the branches and
higher overheads, which include labour and other cost inflation.
Branch Network overheads also include investment to maintain momentum in our
strategic initiatives, including the new branch opening programme, which
creates a short-term operating profit drag (c.£1.1 million in 2025), but
drives longer-term profit growth. Investment in strategic initiatives also
includes marketing (pay-per-click), and central order processing capability
for windows and doors, and we expect to leverage this investment and improve
margins as volumes grow.
The reported operating profit is stated after non-underlying costs of £3.0
million in 2025, comprised of strategic IT projects and restructuring costs.
Non-underlying costs of £1.4 million in 2024 related to strategic IT
projects.
DIVISIONAL PERFORMANCE - ALUNET
In March 2025 we announced the acquisition of Alunet in a deal that valued the
business at £29 million, based on a multiple of 6.5x Alunet's EBITDA for the
year ended 31 December 2024. Initial consideration paid of £22 million was on
a debt/cash free basis, and future payments over the next four years could
rise to £13 million, contingent upon performance against agreed EBITDA
targets. The maximum future payments, if achieved, would result in a total
consideration of £35 million, representing a multiple of c.4x Alunet's
projected EBITDA for the year ended 31 December 2028.
Approximately £1 million of the initial payment was in the form of ordinary
shares in Eurocell plc and satisfied out of shares held in treasury, with the
remainder payable in cash, funded from the Group's existing £75 million
revolving credit facility.
2025 2024 Change
£m £m %
Third-party revenue 46.7 - n/a
Inter-segmental revenue - - n/a
Total revenue 46.7 - n/a
Adjusted((1)) operating profit 4.8 - n/a
Operating profit 4.8 - n/a
(1) Adjusted performance measures are stated before non-underlying items.
In the period from the acquisition at the beginning of March to 31 December
2025, Alunet external sales were £46.7 million. This represents growth of 28%
compared to the corresponding period in 2024, driven by market share gains,
particularly in Alunet Systems and Comp Door, which together represent c.75%
of Alunet's sales.
Since the acquisition, Alunet Systems has benefited from group synergies and
secured new business with 14 Eurocell fabricators, as well as successfully
launched the Aluna+ aluminium window system, which complements the new
Eurocell Iconiq aluminium roof lantern. Comp Door has continued to acquire new
installers, with the new SleekSkin door now representing more than 15% of
sales and we expect the business to benefit from cross-selling opportunities
and supply chain synergies with Vista.
Alunet post-acquisition adjusted operating profit for 2025 was £4.8 million,
which is up £1.8 million on 2024.
The Corporate segment operating profit includes a further underlying charge of
£0.4 million relating to the Alunet acquisition, comprising amortisation of
acquired intangible assets and the unwind of discounting of future contingent
consideration, and a non-underlying charge of £0.4 million relating to
acquisition expenses.
OPERATING PROFIT
Adjusted operating profit for 2025 was £24.1 million, up 6% on 2024. This
reflects a strong contribution from Alunet and effective cost control,
partially offset by lower organic volumes, competitive pressure on selling
prices in the branches, labour cost inflation and targeted investment to
maintain momentum in our strategic initiatives.
FINANCE COSTS AND TAXATION
Finance costs for 2025 were £5.1 million, which includes incremental interest
of approximately £1.0m arising on higher debt following the Alunet
acquisition. Finance costs in 2024 were £2.8 million.
The underlying tax charge for 2025 was £4.2 million (2024: £4.6 million).
The total tax charge for 2025 was £2.6 million (2024: £3.3 million). The
effective tax rate on underlying profit before tax for 2025 of 22% is lower
than the standard rate of corporation tax of 25% due to Patent Box relief and
the impact of share options exercised during the year.
We were pleased to retain the Fair Tax Mark accreditation in 2025, reflecting
our commitment to paying the right amount of tax at the right time.
PROFIT BEFORE TAX AND EARNINGS PER SHARE
Adjusted profit before tax for the year was £19.0 million compared to £20.0
million in 2024, reflecting the increase in adjusted operating profit
described above, offset by increased finance costs following the Alunet
acquisition.
Reported profit before tax in 2025 was £12.2 million (2024: £13.8 million),
reflecting the above less £6.8 million of non-underlying costs (2024: £6.2
million).
Adjusted basic earnings per share were 14.6 pence and diluted earnings per
share for the year were 14.5 pence (2024: 14.4 pence and 14.3 pence
respectively). Total basic earnings per share were 9.5 pence and total diluted
earnings per share were 9.4 pence (2024: 9.8 pence and 9.7 pence
respectively).
DIVIDENDS AND SHARE BUYBACKS
The Board is committed to driving shareholder returns through a combination of
ordinary dividends and supplementary distributions (currently via share
buybacks).
The £5 million share buyback announced in March 2025 is now complete. Our
intention remains to continue share buybacks, assuming no prolonged impact
from the situation in the Middle East and subject to maintaining a strong
financial position.
We paid an interim dividend in October 2025 of 2.3 pence per share, up 5% on
the prior year (2024: 2.2 pence per share). The Board proposes a final
dividend of 4.1 pence per share (2024: 3.9 pence per share), which results in
total dividends for the year of 6.4 pence per share (2024: 6.1 pence per
share), up 5% and totalling £6.4 million (2024: £6.2 million). Total returns
announced for 2025 are therefore £11.4 million, equivalent to a yield of
c.8%. This follows total returns for 2024 of £21.2 million (including a
buyback of £15 million), equivalent to a yield of c.14%.
The dividend will be paid on 19 May 2026 to shareholders registered at the
close of business on 17 April 2026. The ex-dividend date will be 16 April
2026.
The retained earnings of Eurocell plc as at 31 December 2025 were £33.8
million (2024: £41.2 million). The Company takes steps to ensure
distributable reserves are maintained at an appropriate level through
intra-Group dividend flows.
CAPITAL EXPENDITURE
Capital expenditure for 2025 of £11.8 million (2024: £10.7 million) includes
£3.7 million for new branches and site relocations, but is otherwise largely
maintenance in nature.
CASH FLOW
Net cash generated from operating activities was £48.4 million (2024: £44.2
million), reflecting good cash flow generation, including a net inflow from
working capital of £3.7 million, comprised of an increase in inventories
(£0.2 million), decrease in receivables (£0.9 million) and an increase in
payables (£3.0 million). This compares to a net outflow from working capital
of £0.2 million in 2024. Net cash generated from operating activities also
includes net tax paid in the year of £1.7 million (2024: £3.0 million).
Other cash flow items include payments for capital investments of £12.5
million (2024: £10.3 million), including the net movement on capital
creditors of £0.7 million and financing costs paid of £1.9 million (2024:
£0.7 million), plus the initial Alunet cash consideration (net of cash
acquired) of £20.6 million.
The principal elements of lease payments of £16.4 million (2024: £14.4
million) are presented within cash flows arising from financing activities.
The finance elements of lease payments were £2.9 million (2024: £2.1
million).
Dividends paid in the year were £6.2 million, being the 2024 final and 2025
interim payments (2024: dividends paid: £6.1 million). Cash paid under the
share buyback programmes, including for shares held in treasury and
transaction costs, was £6.0 million (2024: £14.5 million).
NET DEBT
Net debt on a pre-IFRS 16 basis at 31 December 2025 was £22.1 million (31
December 2024: £3.1 million), down from £29.0 million at 30 June 2025,
reflecting good cash generation in the second half. Lease liabilities
increased by £16.7 million, due to new branches, plus the properties and
vehicles acquired with Alunet. Total net debt at 31 December 2025 was £98.2
million (31 December 2024: £62.5 million).
2025 2024 Change
£m £m £m
Cash 6.3 0.4 5.9
Bank overdrafts - (3.0) 3.0
Borrowings (27.7) (0.5) (27.2)
Deferred consideration (0.7) - (0.7)
Net debt (pre-IFRS 16) (22.1) (3.1) (19.0)
Lease liabilities (76.1) (59.4) (16.7)
Total net debt (98.2) (62.5) (35.7)
BANK FACILITY
Our activities are funded via our £75 million unsecured Revolving Credit
Facility, which was refinanced in March 2026 and now matures in 2030. The
facility is provided by Barclays, NatWest and AIB, and is competitively
priced. We operate comfortably within the terms of the facility and in
compliance with our financial covenants, which are measured on a pre-IFRS 16
basis.
Michael Scott
Chief Financial Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2025
Year ended 31 December 2025 Year ended 31 December 2024
Underlying ((1))Non- Total Underlying ((1))Non- Total
underlying underlying
Note £m £m £m £m £m £m
Revenue 3 403.5 - 403.5 357.9 - 357.9
Cost of sales (198.2) - (198.2) (169.6) - (169.6)
Gross profit 205.3 - 205.3 188.3 - 188.3
Distribution costs (28.0) - (28.0) (25.7) - (25.7)
Administrative expenses (153.2) (6.8) (160.0) (139.8) (6.2) (146.0)
Operating profit 3 24.1 (6.8) 17.3 22.8 (6.2) 16.6
Finance expense (5.1) - (5.1) (2.8) - (2.8)
Profit before tax 3 19.0 (6.8) 12.2 20.0 (6.2) 13.8
Taxation 4 (4.2) 1.6 (2.6) (4.6) 1.3 (3.3)
Profit for the year and total comprehensive income 14.8 (5.2) 9.6 15.4 (4.9) 10.5
Basic earnings per share 5 14.6p 9.5p 14.4p 9.8p
Diluted earnings per share 5 14.5p 9.4p 14.3p 9.7p
(1) Non-underlying items are detailed in Note 2.
Consolidated Statement of Financial Position
As at 31 December 2025
2025 2024
£m £m
Assets
Non-current assets
Property, plant and equipment 63.2 60.5
Right-of-use assets 71.6 54.3
Goodwill 36.1 10.8
Intangible assets 4.7 3.8
Total non-current assets 175.6 129.4
Current assets
Inventories 53.6 47.2
Trade and other receivables 51.9 45.8
Corporation tax 0.4 1.0
Cash and cash equivalents 6.3 0.4
Total current assets 112.2 94.4
Total assets 287.8 223.8
Liabilities
Current liabilities
Trade and other payables (54.0) (45.2)
Contingent consideration (3.7) -
Deferred consideration (0.6) -
Lease liabilities (14.4) (12.5)
Bank overdrafts - (3.0)
Provisions (0.5) (0.4)
Total current liabilities (73.2) (61.1)
Non-current liabilities
Borrowings (27.7) (0.5)
Contingent consideration (8.5) -
Deferred consideration (0.1) -
Lease liabilities (61.7) (46.9)
Provisions (1.8) (1.3)
Deferred tax (10.0) (8.6)
Total non-current liabilities (109.8) (57.3)
Total liabilities (183.0) (118.4)
Net assets 104.8 105.4
Equity attributable to equity holders of the parent
Share capital 0.1 0.1
Share premium account 22.2 22.2
Treasury shares (0.9) (2.0)
Share-based payment reserve 2.4 2.3
Share buyback reserve - -
Retained earnings 81.0 82.8
Total equity 104.8 105.4
Consolidated Cash Flow Statement
For the year ended 31 December 2025
Year ended Year ended
31 December 31 December
2025 2024
Note £m £m
Cash generated from operations 7 50.1 47.2
Income taxes paid (1.7) (3.0)
Net cash generated from operating activities 48.4 44.2
Investing activities
Acquisition of subsidiaries (net of cash acquired) 9 (20.6) -
Purchase of property, plant and equipment (12.3) (10.2)
Purchase of intangible assets (0.2) (0.1)
Net cash used in investing activities (33.1) (10.3)
Financing activities
Purchase of own shares held as treasury shares (1.0) (1.9)
Share buybacks 11 (5.0) (12.6)
Exercise of share options - (0.1)
Proceeds of bank and other borrowings 27.0 1.0
Principal elements of lease payments (16.4) (14.4)
Finance elements of lease payments (2.9) (2.1)
Finance expense paid (1.9) (0.7)
Dividends paid to equity Shareholders 6 (6.2) (6.1)
Net cash used in financing activities (6.4) (36.9)
Net increase/(decrease) in cash and cash equivalents((1)) 8.9 (3.0)
Cash and cash equivalents((1)) at beginning of year (2.6) 0.4
Cash and cash equivalents((1)) at end of year 6.3 (2.6)
(1) Cash and cash equivalents includes bank overdrafts as overdrafts form
part of the Group's cash pooling facility
Consolidated Statement of Changes in Equity
For the year ended 31 December 2025
Share Share-based Share
Share premium Treasury payment buyback Retained Total
capital account shares reserve reserve earnings equity
£m £m £m £m £m £m £m
Balance at 1 January 2025 0.1 22.2 (2.0) 2.3 - 82.8 105.4
Comprehensive income for the year
Profit for the year - - - - - 9.6 9.6
Total comprehensive income for the year - - - - - 9.6 9.6
Contributions by and distributions to owners
Exercise of share options - - 1.0 (0.9) - (0.2) (0.1)
Alunet acquisition - - 1.1 - - - 1.1
Share-based payments - - - 1.0 - - 1.0
Purchase of own shares - - (1.0) - (4.9) (0.1) (6.0)
Cancellation of shares - - - - 4.9 (4.9) -
Dividends paid - - - - - (6.2) (6.2)
Total transactions with owners recognised directly in equity - - 1.1 0.1 - (11.4) (10.2)
Balance at 31 December 2025 0.1 22.2 (0.9) 2.4 - 81.0 104.8
Share Share-based Share
Share premium Treasury payment buyback Retained Total
capital account shares reserve reserve earnings equity
£m £m £m £m £m £m £m
Balance at 1 January 2024 0.1 22.2 (0.1) 0.9 - 91.2 114.3
Comprehensive income for the year
Profit for the year - - - - - 10.5 10.5
Total comprehensive income for the year - - - - - 10.5 10.5
Contributions by and distributions to owners
Exercise of share options - - - (0.1) - (0.2) (0.3)
Share-based payments - - - 1.5 - - 1.5
Purchase of own shares - - (1.9) - (12.4) (0.2) (14.5)
Cancellation of shares - - - - 12.4 (12.4) -
Dividends paid - - - - - (6.1) (6.1)
Total transactions with owners recognised directly in equity - - (1.9) 1.4 - (18.9) (19.4)
Balance at 31 December 2024 0.1 22.2 (2.0) 2.3 - 82.8 105.4
1 BASIS OF PREPARATION
The financial information for the year ended 31 December 2025 was approved by
the Board on 18 March 2026. This financial information does not constitute the
statutory accounts of the Company within the meaning of Section 435 of the
Companies Act 2006, but is derived from those accounts, which have been
prepared in accordance with UK-adopted International Accounting Standards and
with the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards.
This information has been prepared under the historical cost method, using all
standards and interpretations required for financial periods beginning 1
January 2025. The functional currency is Sterling, and the Financial
Statements are presented in millions, unless otherwise stated. No standards or
interpretations have been adopted before the required implementation date.
Statutory accounts for the year ended 31 December 2024 have been delivered to
the Registrar of Companies. Statutory accounts for the year ended 31 December
2025 will be delivered to the Registrar of Companies following the Company's
Annual General Meeting.
The auditors have reported on those accounts. Their reports were not
qualified, did not include a reference to any matters to which the auditors
drew attention by way of emphasis without qualifying their report, and did not
contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
Going concern
The Group funds its activities through a £75 million Revolving Credit
Facility, provided by Barclays, NatWest and AIB, which matures in March 2030.
The facility includes two key financial covenants, which are tested at 30 June
and 31 December on a pre-IFRS 16 basis. These are that net debt should not
exceed 3 times adjusted EBITDA (Leverage), and that adjusted EBITDA should be
at least 4 times the interest charge on the debt (Interest Cover).
At 31 December 2025 the Group has complied with all of its covenants, and it
expects to do so for the next measurement period, being 30 June 2026, and
going forward.
In assessing going concern, the Directors have considered financial
projections for the period to December 2027, which is consistent with the
Board's strategic planning horizon and reflects a period of at least 12 months
from the date of approval of the Financial Statements. These forecasts have
been compiled based on the best estimates of the Group's commercial and
operational teams. This includes a severe but plausible 'Downside' scenario,
which reflects demand for the Group's products being severely weakened.
In all scenarios tested, including sensitivities reducing sales forecasts to
10% below management's estimates for the period 2026 - 27, key raw material
prices increasing by 33% over that period and both scenarios combined, the
Group operates with significant headroom on its RCF facility and remains
compliant with its original covenants.
After reviewing the Group's projected financial performance and financing
arrangements, the Directors consider that the Group has adequate resources to
continue operating and that it is therefore appropriate to continue to adopt
the going concern basis in preparing the Financial Statements.
Changes in accounting policies and disclosures applicable to the Company and
the Group
In the current year, the Group has applied the amendment below to IFRS
Standards and Interpretations issued by the International Accounting Standards
Board (IASB) that is mandatorily effective for an accounting period that
begins on or after 1 January 2025, with no material impact:
· Amendments to IAS 21 - Lack of Exchangeability.
The following new accounting standards, amendments to accounting standards and
interpretations have been published that are not mandatory for 31 December
2025 reporting periods and have not been early adopted by the Group:
· Amendments to IFRS 9 and IFRS 7 - Classification and Measurement of
Financial Instruments;
· IFRS 18 - Presentation and Disclosure in Financial Statements; and
· IFRS 19 - Subsidiaries without Public Accountability: Disclosures.
These standards, amendments or interpretations are not expected to have a
material impact on the Group in the current or future reporting periods and on
foreseeable future transactions.
IFRS 18 becomes effective for annual reporting periods beginning on or after 1
January 2027, with earlier application permitted. IFRS 18 replaces IAS 1,
carrying forward many of the requirements in IAS 1 unchanged and complementing
them with new requirements. In addition, some paragraphs from IAS 1 have been
moved to IAS 8 and IFRS 7. Furthermore, the IASB has made minor amendments to
IAS 7 and IAS 33 Earnings per Share.
The amendments to IAS 7 and IAS 33, as well as the revised IAS 8 and IFRS 7,
become effective when IFRS 18 is applied. IFRS 18 requires retrospective
application with specific transition provisions. The Directors anticipate that
the application of these amendments will have an impact on the Group's
consolidated financial statements in future periods.
2 NON-UNDERLYING ITEMS
Amounts included in the Consolidated Statement of Comprehensive Income are as
follows:
2025 2024
£m £m
Strategic IT expenses 4.2 2.2
Restructuring costs 1.8 -
Acquisition costs 0.4 0.8
Asset impairment charge and related expenses 0.4 3.2
Non-underlying operating expenses 6.8 6.2
Taxation (1.6) (1.3)
Impact on profit after tax 5.2 4.9
Strategic IT expenses
Strategic IT expenses of £4.2 million (2024: £2.2 million) relate to costs
incurred on strategic IT projects involving 'Software as a Service'
arrangements and internal resourcing costs which are expensed as incurred
rather than being capitalised as intangible assets.
Such items are considered to be non-underlying in nature because they relate
to multi-year programmes to deliver strategic IT implementations which are
material in size. Strategic IT projects include the replacement of our
Enterprise Resource Planning ('ERP') system, including a new trade counter
system for the Branch Network. The expected non-underlying cost of the system
replacement is in the region of £13 million over the 2024-27 period.
Restructuring costs
A restructuring of the Branch Network was completed in April 2025, with the
removal of a layer of regional operational management, a reduction in the size
of the salesforce and closure of a small number of underperforming branches.
Further restructuring work was also completed in Operations and Shared
Services. In total 53 roles were impacted at a cost of £1.8 million,
comprising redundancy costs and related asset impairments.
Acquisition costs
In March 2025, the Group completed the acquisition of the Alunet Group. In
total, acquisition-related expenses of £1.2 million were incurred in the
process, comprising deal advisory, legal and due diligence costs.
Asset impairment charges
The right-of-use asset impairment charge arose in 2024 following a dispute
with the landlord at a secondary warehouse in Derbyshire, where there was
significant deterioration to the flooring. Following legal advice, the Group
terminated the lease. The landlord contested the termination and issued
proceedings for unpaid rent. The Group determined that the landlord issuing
legal proceedings represented an impairment trigger for the right-of-use
asset, which had a net book value of £3.2 million at that time. With the site
not in condition for use and the outcome of the dispute uncertain, the lease
asset was impaired in full in 2024 (a non-cash item). Legal and other costs
relating to the dispute of £0.4 million were incurred in 2025.
Impact on cash flow
Of the £6.8 million non-underlying expenses recognised in 2025, £6.1 million
was settled in cash at 31 December 2025 and £0.2 million related to non-cash
impairment charges. The remaining £0.5 million will be settled within the
next twelve months. £3.0 million of the non-underlying expenses incurred in
2024 were settled in cash at 31 December 2025. The remaining £3.2 million
related to non-cash impairment charges.
3 SEGMENTAL INFORMATION
The Group organises itself into a number of operating segments that offer
different products and services. They are managed separately because each
business requires different technology and marketing strategies. Internal
reporting provided to the chief operating decision-maker, which has been
identified as the executive management team including the Chief Executive and
the Chief Financial Officer, reflects this structure.
The Group has aggregated its operating segments into four reported segments,
as these business units have similar products, production processes, types of
customer, methods of distribution, regulatory environments and economic
characteristics:
· Profiles - extrusion and sale of PVC window and building products
to the new and replacement market in the UK. This segment includes Vista
Panels, S&S Plastics and Eurocell Recycle.
· Building Plastics - sale of plastic building materials through
the Branch Network substantially all in the UK.
· Alunet - sale of aluminium window and composite door products to
the new and replacement market in the UK. This segment includes Alunet
Systems, Comp Door, JDUK and UK Doors (Midlands).
· Corporate - represents income and costs relating to the ultimate
parent company and includes the assets and related amortisation in respect of
acquired intangible assets.
Inter-segmental sales, which are eliminated on consolidation, are transacted
at an arms' length basis and relate to manufactured products distributed by
the Building Plastics division.
Building Corporate Total
2025 Profiles Plastics Alunet
£m £m £m £m £m
Revenue
Total revenue 208.2 210.5 46.7 - 465.4
Inter-segmental revenue (61.5) (0.4) - - (61.9)
Total revenue from external customers 146.7 210.1 46.7 - 403.5
Adjusted EBITDA 30.5 14.3 5.8 0.9 51.5
Amortisation of intangible assets - - - (1.3) (1.3)
Depreciation of property, plant and equipment (6.8) (1.6) (0.7) (1.0) (10.1)
Depreciation of right-of-use assets (6.3) (9.3) (0.3) (0.1) (16.0)
Adjusted operating profit/(loss) 17.4 3.4 4.8 (1.5) 24.1
Non-underlying operating expenses (3.4) (3.0) - (0.4) (6.8)
Operating profit/(loss) 14.0 0.4 4.8 (1.9) 17.3
Finance expense (5.1)
Profit before tax 12.2
2024 Profiles Building Plastics Corporate Total
Alunet
£m £m £m £m £m
Revenue
Total revenue 209.8 212.3 - - 422.1
Inter-segmental revenue (63.7) (0.5) - - (64.2)
Total revenue from external customers 146.1 211.8 - - 357.9
Adjusted EBITDA 33.3 15.7 - (0.9) 48.1
Amortisation of intangible assets - - - (1.3) (1.3)
Depreciation of property, plant and equipment (7.5) (1.3) - (0.8) (9.6)
Depreciation of right-of-use assets (6.4) (7.9) - (0.1) (14.4)
Adjusted operating profit/(loss) 19.4 6.5 - (3.1) 22.8
Non-underlying operating expenses (4.8) (1.4) - - (6.2)
Operating profit/(loss) 14.6 5.1 - (3.1) 16.6
Finance expense (2.8)
Profit before tax 13.8
Building Corporate Total
2025
Profiles Plastics Alunet
£m £m £m £m £m
Additions to plant, property, equipment and intangible assets 5.7 4.0 1.1 1.0 11.8
Segment assets 128.6 94.3 49.0 15.9 287.8
Segment liabilities (58.5) (57.3) (11.0) (18.5) (145.3)
Borrowings (27.7)
Deferred tax (10.0)
Total liabilities (183.0)
Total net assets 104.8
2024 Profiles Building Alunet Corporate Total
Plastics
£m £m £m £m £m
Additions to plant, property, equipment and intangible assets 7.1 2.7 - 0.9 10.7
Segment assets 122.3 84.0 - 17.5 223.8
Segment liabilities (53.2) (48.9) - (7.2) (109.3)
Borrowings (0.5)
Deferred tax liability (8.6)
Total liabilities (118.4)
Total net assets 105.4
Geographical information
Revenue(()(1)) Non-current assets Revenue(()(1)) Non-current assets
2025 2025 2024 2024
£m £m £m £m
United Kingdom 401.3 175.6 355.8 129.4
Republic of Ireland((2)) 2.2 - 2.1 -
Total 403.5 175.6 357.9 129.4
((1)) Revenues are stated based on the location of point of sale.
((2)) The net book value of non-current assets in the Republic of Ireland was
less than £50,000 in both years.
4 TAXATION
2025 2024
£m £m
Current tax expense
Current tax on profits for the year 2.4 3.0
Adjustment in respect of prior years (0.4) (0.3)
Total current tax 2.0 2.7
Deferred tax expense
Origination and reversal of temporary differences 0.8 0.4
Adjustment in respect of prior years (0.2) 0.2
Total deferred tax 0.6 0.6
Total tax expense 2.6 3.3
The reasons for the difference between the actual current tax charge for the
year and the standard rate of corporation tax in the United Kingdom applied to
profits for the year are as follows:
2025 2024
£m £m
Profit before tax 12.2 13.8
Expected tax charge based on the standard rate of corporation tax in the UK of 3.1 3.4
25%
(2024: 25%)
Taxation effect of:
Expenses not deductible for tax purposes 0.6 0.6
Patent Box claims (0.5) (0.4)
Deferred tax impact of share-based payments - 0.4
Adjustments in respect of prior years (0.4) (0.3)
Tax effect of accelerated capital allowances (0.8) (1.0)
Current tax expense 2.0 2.7
The reasons for the difference between the total tax charge for the year and
the standard rate of corporation tax in the United Kingdom applied to profits
for the year are as follows:
2025 2024
£m £m
Profit before tax 12.2 13.8
Expected tax charge based on the standard rate of corporation tax in the UK of 3.1 3.4
25%
(2024: 25%)
Taxation effect of:
Expenses not deductible for tax purposes 0.4 0.4
Patent Box claims (0.5) (0.4)
Derecognition of trading losses 0.2 -
Adjustments in respect of prior years (0.6) (0.1)
Total tax expense 2.6 3.3
Some expenses incurred, such as certain legal and entertainment costs, are not
allowable for tax purposes and are therefore not deducted from taxable income
when calculating the Group's tax liability.
Capital allowances are tax reliefs for the expenditure the Group makes on
fixed assets. The difference between the accounting treatment of fixed assets
for tax and accounting purposes gives rise to temporary differences recognised
within deferred tax.
The Group recognises a current tax asset in respect of relief claimed under
the Patent Box when the inflow of economic benefits arising from that asset is
virtually certain, deemed to be the submission of a claim to HM Revenue and
Customs. Under the Patent Box regime, tax relief is available on relevant
profits from the sales of goods covered by qualifying Intellectual Property
rights, held by Eurocell Profiles Limited.
Changes in tax rates and factors affecting the future tax charge
There was no change to the rate of UK corporation tax in the year.
There are no material uncertain tax provisions.
Tax included in Other Comprehensive Income
The tax charge arising on share-based payments within Other Comprehensive
Income is £nil (2024: £nil).
Based on the current investment plans of the Group, and assuming the rates of
capital allowances on capital expenditure continue into the future, there is
little prospect of any significant part of the deferred tax liability becoming
payable over the next three years.
Tax residency
Eurocell plc and its subsidiaries are all registered in the United Kingdom and
are resident in the UK for tax purposes, except as described below.
The Group has two branches in the Republic of Ireland, with combined annual
revenues of £2.2 million (2024: £2.1 million), total assets of less than
£50,000 (2024: less than £50,000) and seven full time employees (2024: nine
full time employees). For tax purposes these two trading locations form a
single branch within Eurocell Building Plastics Limited, and therefore any
profits generated are subject to tax in the Republic of Ireland. Profits
generated during the year contribute less than 5% of the overall Group profits
(2024: less than 5%). The tax charge in relation to the Group's Republic of
Ireland operations in 2025 is €570 (2024: €600) and tax payments of €570
were made during the year (2024: €600). The reasons for the difference
between the tax charge for the year and the standard rate of corporation tax
in Ireland applied to the profits for the year is due to utilisation of losses
brought forward. No deferred tax assets are recognised on unutilised losses
due to the uncertainty of future profits in the Republic of Ireland (2024:
none).
5 EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the net profit for the year
attributable to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the year, excluding treasury shares.
Adjusted earnings per share excludes the impact of non-underlying items.
Diluted earnings per share is calculated by adjusting the earnings and number
of shares for the effects of dilutive options. In the event that a loss is
recorded for the period, share options are not considered to have a dilutive
effect.
The company has entered into multiple share buyback programmes. During 2025,
the cash outflow in regard to these schemes, including transactional costs
(but excluding purchases of shares held as treasury shares), totalled £5.0
million (2024: £12.6 million), with 3,331,218 shares repurchased (2024:
10,287,011 shares repurchased).
2025 2024
£m £m
Profit attributable to ordinary shareholders excluding non-underlying items 14.8 15.4
Profit attributable to ordinary shareholders 9.6 10.5
Number Number
Weighted average number of shares - basic 100,739,059 106,455,702
Dilutive impact of share options granted 1,097,003 1,339,708
Weighted average number of shares - diluted 101,836,062 107,795,410
Pence Pence
Basic earnings per share 9.5 9.8
Adjusted basic earnings per share 14.6 14.4
Diluted earnings per share 9.4 9.7
Adjusted diluted earnings per share 14.5 14.3
6 DIVIDENDS
2025 2024
£m £m
Dividends paid during the year
Interim dividend for 2025 of 2.3p per share (2024: 2.2p per share) 2.3 2.3
Final dividend for 2024 of 3.9p per share (2023: 3.5p per share) 3.9 3.8
6.2 6.1
Dividends proposed
Final dividend for 2025 of 4.1p per share 4.1 -
Final dividend for 2024 of 3.9p per share - 4.0
4.1 4.0
7 RECONCILIATION OF PROFIT AFTER TAX TO CASH GENERATED FROM OPERATIONS
2025 2024
£m £m
Profit after tax 9.6 10.5
Taxation (Note 4) 2.6 3.3
Finance expense 5.1 2.8
Operating profit 17.3 16.6
Adjustments for:
Depreciation of property, plant and equipment 10.1 9.6
Depreciation of right-of-use assets 16.0 14.4
Amortisation of intangible assets 1.3 1.3
Impairment of tangible and right-of-use assets - 3.2
Loss on disposal of property, plant and equipment 0.2 0.4
Share-based payments 1.0 1.5
Increase in inventories (0.2) (0.5)
Decrease/(increase) in trade and other receivables 0.9 (3.4)
Increase in trade and other payables 3.0 3.7
Increase in provisions 0.5 0.4
Cash generated from operations 50.1 47.2
8 ALTERNATIVE PERFORMANCE MEASURES
The Group uses alternative performance measures alongside statutory measures
to facilitate a better understanding of financial performance and comparison
with prior periods, and in order to provide audited financial information
against which the Group's bank covenants, which are all measured on a pre-IFRS
16 basis, can be assessed.
EBITDA is defined as operating profit before depreciation and amortisation
charges. Pre-IFRS 16 EBITDA is stated inclusive of operating lease rentals
under IAS 17 Leases.
Adjusted EBITDA, profits and earnings per share exclude non-underlying items.
Adjusted profit measures allow users of the Financial Statements to better
understand financial performance in the year by removing certain material
items of income and expense that are unusual due to their nature or
infrequency, thus facilitating better comparison with prior periods.
Covenants are assessed on a pre-IFRS 16 adjusted EBITDA, continuing basis.
2025 2024
£m £m
Operating profit 17.3 16.6
Depreciation and amortisation 27.4 25.3
EBITDA 44.7 41.9
Non-underlying items 6.8 6.2
Adjusted EBITDA 51.5 48.1
Operating lease rentals under IAS 17 (18.8) (16.3)
Pre-IFRS 16 adjusted EBITDA 32.7 31.8
Pre-IFRS 16 total net debt is defined as total borrowings and lease
liabilities less cash and cash equivalents and deferred consideration,
excluding the impact of leases recognised under IFRS 16 Leases.
2025 2024
£m £m
Total net debt 98.2 62.5
Lease liabilities (76.1) (59.4)
Pre-IFRS 16 net debt 22.1 3.1
9 ACQUISITION OF SUBSIDIARIES
On 7 March 2025 the Group acquired 100% of the ordinary share capital of
Alunet Systems Limited, Comp Door Limited, JD (UK) Investments Limited, JD
(UK) Limited and UK Doors (Midlands) Limited, together "the Alunet Group", for
an initial consideration of £22.3 million. Of the initial consideration,
£1.1 million was in the form of ordinary shares in Eurocell plc and satisfied
out of shares held in treasury, with the remainder paid in cash. Further
consideration of up to £13.7 million is payable over the next four years,
contingent upon future performance. The Group's current best estimate of the
present value of the future amounts payable at acquisition was £12.5 million.
Goodwill represents potential synergies arising from the enlarged group. The
amount of goodwill deductible for tax purposes is £nil.
An assessment of the value of net assets acquired has been completed. The
Group has 12 months from the date of the acquisition to revise this
assessment. The Goodwill recognised for the combined Alunet Group has been
estimated as follows:
Book values on acquisition Fair value adjustment Recognised values on acquisition
Total acquired assets and liabilities £m £m £m
Intangible assets - 2.0 2.0
Property, plant and equipment 1.4 - 1.4
Right-of-use assets - 3.3 3.3
Inventories 5.5 0.7 6.2
Trade and other receivables 7.5 (0.2) 7.3
Cash and cash equivalents 0.6 - 0.6
Trade and other payables (6.7) - (6.7)
Lease liabilities - (3.4) (3.4)
Provisions - (0.1) (0.1)
Corporation tax (0.3) - (0.3)
Deferred tax (0.1) (0.7) (0.8)
Identifiable assets and liabilities 7.9 1.6 9.5
Cash consideration paid 21.2
Equity issued as consideration 1.1
Present value of deferred consideration 0.6
Present value of contingent consideration 11.9
Total consideration 34.8
Goodwill on acquisition 25.3
Cash flows arising on the acquisition were £20.6 million comprising the
initial cash consideration paid less cash acquired.
Had the Alunet Group been consolidated from 1 January 2025 the Consolidated
Statement of Comprehensive Income would have included revenue of £53.3
million and operating profit of £4.4 million.
Fair value adjustments
· The adjustment to intangible assets is to recognise intangible
assets in respect of customer relationships and has been valued using
discounted cash flows.
· The adjustments to right-of-use assets and lease liabilities
relate to the adoption of IFRS 16 Leases.
· The adjustment to inventories is to reflect the fair value of
finished goods acquired.
· The adjustment to trade receivables is a bad debt provision which
has been made as part of the fair value exercise.
· The adjustment to provisions is to recognise a dilapidations
provision in respect of the leased premises.
· The adjustment to deferred taxation is to recognise the deferred
tax liability arising on the intangible assets.
Subsequent payments
Under the terms of the acquisition agreement, the vendors are entitled to
further cash consideration based on financial performance for the years ended
31 December 2025-28. An element of this further consideration is of certain
amount and timing and has therefore been recognised as deferred consideration
(£0.6 million). The remaining consideration is dependent upon future
performance and has therefore been classified as contingent consideration. The
estimated amount of contingent consideration is £13.1 million, and a
liability for the present value of this amount has been recognised within
Current and Non-Current Liabilities (in total £11.9 million). The discount
will be unwound through Finance Expense in the Consolidated Statement of
Comprehensive Income.
Acquisition-related costs
The Group incurred acquisition-related costs of £0.4 million in 2025 in
relation to professional fees and transaction costs arising upon acquisition.
Costs of £0.8 million were incurred in the year ending 31 December 2024.
These costs have been expensed to the Consolidated Statement of Comprehensive
Income in the relevant periods.
10 BORROWINGS
The book and fair value of borrowings are as follows:
31 December 2025 31 December 2024
Book value Fair Book value Fair
£m value £m value
£m £m
Non-current
Bank borrowings unsecured 27.7 27.7 0.5 0.5
The Group has a £75 million multi-currency revolving unsecured credit
facility, which was refinanced in March 2026 and now matures in 2030. Interest
is charged at an excess over base rate of between 1.5% and 2.5% per annum and
is dependent upon the ratio of total net debt to consolidated EBITDA (on a
pre-IFRS 16 basis).
The facility includes two key financial covenants, which are tested at 30 June
and 31 December on a pre-IFRS 16 basis. These are that net debt should not
exceed 3 times adjusted EBITDA (Leverage), and that adjusted EBITDA should be
at least 4 times the interest charge on the debt (Interest Cover).
Borrowings of £28.0 million were drawn down at 31 December 2025 (31 December
2024: £1.0 million). The average drawdown on the facility during the year
ended 31 December 2025 was £28.1 million (2024: £2.3 million). Total
unamortised costs of £0.3 million as at 31 December 2025 (31 December 2024:
£0.5 million) are presented as a deduction to borrowings.
The bank borrowings outstanding at 31 December 2025 are classified as
non-current liabilities as they relate to committed facilities available to
the Group until 2030. The book value and fair value are not considered to be
materially different.
All of the Group's borrowings are denominated in Sterling.
The analysis of repayments on the combined borrowings is as follows:
31 December 2025 31 December 2024
£m £m
Within one year or repayable on demand - -
Between one and two years 28.0 -
Between two and five years - 1.0
28.0 1.0
11 SHARE BUYBACKS
A share buyback of £15 million launched in January 2024 was completed in
February 2025 and a further buyback of £5 million launched in March 2025 was
completed in February 2026. During 2025, a total of 3.3 million shares were
purchased under these two programmes, with an associated cash outflow of £5.0
million (including transactional costs).
12 EVENTS AFTER THE BALANCE SHEET DATE
In February 2026, to further improve safety, reliability and to reduce cost,
we began a project to consolidate our two recycling plants onto the existing
recycling facility at Ilkeston. The project requires relocation of certain
critical equipment from the site at Selby, plus investment in the Ilkeston
plant to eliminate single points of failure, enhance the layout and improve
working conditions. We expect to cease operations at Selby and begin full
processing at Ilkeston in H2 2026, with the Selby site exit to be concluded by
the end of the year. Capital investment is expected to be c.£2.6 million,
with annualised cost savings of c.£1.5 million running from 2027.
Non-underlying charges are expected to be in the region of £3 million,
including non-cash asset write downs of c.£1.5 million.
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