REG - Genuit Group PLC - Trading Update

GenuitAnnouncement

18/05/2023 07:00

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RNS Number : 7962Z  Genuit Group PLC  18 May 2023

 

18 May 2023

Genuit Group plc

Trading Update

 

Genuit Group plc ("Genuit", the "Company" or the "Group"), the UK's largest
provider of sustainable water, climate and ventilation solutions for the built
environment, today issues an update on trading for the four months ended 30
April 2023 ahead of its Annual General Meeting ("AGM"), which takes place at
10:30hrs (BST) today at 4 Victoria Place, Holbeck, Leeds LS11 5AE. The Company
will report its interim results for the six months ending 30 June 2023 on 15
August 2023.

Current trading and outlook

·     Revenues in line with our expectations reflecting short-term
market dynamics and disciplined approach to higher quality business

·     Good progress made on self-help measures during the first four
months of the year; margins ahead of the same period in the prior year

·     FY2023 operating profit expected to be slightly ahead of current
consensus for the year*

 

Group revenue for the four months ended 30 April 2023 was £201.0m (2022:
£209.0m), 3.8% lower than in 2022. On a like-for-like basis, Group revenue
was 4.7%** lower, reflecting a market-driven year-on-year volume decline of
circa 11% offset by the Group's focus on managing inflationary pressures
through pricing.

In line with the Group's strategy to drive margin improvement, the Group has
taken a number of actions during the period to simplify the business and
address its cost base. These include the continuing roll out of the Genuit
Business System into two sites across separate businesses, which began last
November, with a third to be launched this year. The Group is on track to
deliver the annualised savings previously announced and sees further
opportunity to simplify the business.

These management actions have driven the Group's performance so far this year
and give the Board confidence of delivering operating profit slightly above
the current consensus for the full year.*

Sustainable Building Solutions revenue, representing approximately 41% of
Group revenue, was 8.5% lower than the same period in 2022, reflecting market
dynamics in the first part of the year. This part of the Group has made the
most year-on-year progress on delivering cost saving initiatives.

Water Management Solutions revenue, representing approximately 29% of Group
revenue, was 5.1% lower than the same period in 2022 (8.1% lower on a
like-for-like basis, adjusting for the impact of the Keytec acquisition**),
but improvements in the quality of the portfolio mix and cost reductions means
this business unit has also significantly improved operating margins compared
to the four months ended April 2022.

Climate Management Solutions revenue, representing approximately 28%*** of
Group revenue, was 7.4% higher than the same period ended April 2022 which was
impacted last year by the isolated cyber incident at Nuaire. During 2023, this
business unit has been particularly affected by ongoing supply chain
shortages, which has meant we have not seen as much progress on cost
reductions as we have seen in our other business units. We expect this to
progressively improve as we move through the financial year, as additional
measures are to be taken and customer demand in ventilation remains more
resilient than in the broader market.

Joe Vorih, Chief Executive Officer said: "Management has made real inroads in
implementing the strategic priorities we set out at the time of our capital
markets event last November; including simplification of Group structures and
savings in procurement spend. I am also particularly pleased to see the
progress already being made introducing the Genuit Business System in those
parts of the business where rollouts have commenced. These improvements are
already visible in our operating margins, which are ahead of the same period
in the prior year, and we see further benefits ahead."

 

* EBIT consensus as compiled by Genuit Group plc is £84m with a range of £70
- £96m.

** Like-for-like as adjusted for acquisitions, disposals (if relevant) and
number of trading days.

*** The remaining 2% of Group revenue consists of Polypipe Italia, which is
not part of our strategic business units.

 

Enquiries:

Genuit Group plc

Joe Vorih, Chief Executive Officer

Paul James, Chief Financial Officer

+44 (0) 113 831 5315

 

Brunswick

Nina Coad

Tom Pigott

+44 (0) 20 7404 5959

 

Notes to Editors:

Genuit Group plc ("Genuit", the "Company" or the "Group"), the UK's largest
provider of sustainable water, climate and ventilation solutions for the built
environment, and among the ten largest manufacturers in Europe, of piping
systems for the residential, commercial, civils and infrastructure sectors by
revenue. It is also a leading designer and manufacturer of energy efficient
solutions in water-based heating systems in the UK. The Group operates from
thirty facilities in total and manufactures the UK's widest range of solutions
for heating, plumbing, drainage and ventilation. The Group primarily targets
the UK and European building and construction markets with a presence in Italy
and the Netherlands and sells to specific niches in the rest of the world.

The Group was established in 1980 and has been listed on the premium segment
of the London Stock Exchange since 2014.

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