REG - Genuit Group PLC - Trading Update

GenuitAnnouncement

15/11/2023 07:00

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RNS Number : 4589T  Genuit Group PLC  15 November 2023

15 November 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 products for the built
environment, today issues an update on trading for the ten months ended 31
October 2023. The Company will report its full year results for the twelve
months ending 31 December 2023 in March 2024.

Highlights

 

·      Trading in the prior four months has been in-line with management
expectations

·      Full Year 2023 Adjusted Operating Profit is expected to be
marginally above market expectations(1)

·      Strong strategic progress has been made in the period, focussed
on business simplification

and continued investment in sustainability-linked growth opportunities

 

Current trading and outlook

Against a backdrop of continued macro-economic uncertainty, the Group's
trading performance has remained resilient since interim results were reported
in August, supported by the diversity of the Group's market segment exposure.
Group revenue for the ten months ended 31 October 2023 was £504.2 million
(2022: £527.2 million), 4.8% lower than the prior year on like-for-like
basis(2), driven by a volume reduction of circa 11%, partially offset with
successful new product launches and commercial management, including
international expansion.

 

·      Sustainable Building Solutions (SBS) sales were £210.0 million,
down 12.3% on the prior year, with revenues in line with previous actions to
reduce lower margin and non-core business in line with business simplification
objectives and volume expectations given prevailing market conditions.

 

·      Water Management Solutions (WMS) sales were £148.7 million, in
line with the prior year, following resilient demand for the Company's
drainage and stormwater attenuation products.

 

·      Climate Management Solutions (CMS) sales were £139.0 million,
representing growth of 5.3% on the prior year, driven by strong demand in the
Nuaire ventilation business, which more than offset reductions in sales at
Adey due to the softness in the gas boiler market.

 

The Group has continued to focus on business simplification measures that
increase the efficiency of operations and partially mitigate the impact of
lower volumes. These measures include undertaking site consolidations to
increase economies of scale, without any associated reduction in production
capacity. Together with other self-help measures, the Group is on course to
deliver a further £7 million of annualised savings in addition to the £8
million announced previously. These further savings have already started to
contribute to the Group's FY23 performance, will help navigate the current
uncertain environment, as well as benefiting the expected incremental profit
improvement when volumes return to more normal levels.

 

The Group's proactive cost action and continued commercial progress is
expected to result in full year adjusted operating profit marginally above
market expectations. This demonstrates progress, despite the current
market headwinds, towards the Group's mid-term operating margin target(3) set
out at the Capital Markets Day in November 2022.

 

The Group remains highly cash generative and net debt has further reduced
since the half year. We continue to anticipate that capital expenditure for
the full year will be less than £40 million, with investments focussed on
business simplification, organic and sustainability-linked growth projects.
The Group expects to report pre-IFRS16 net debt to EBITDA of circa 1.1x at the
year end, reduced from 1.3x at 30 June 2023.

 

 

Joe Vorih, Chief Executive Officer, commented:

 

"We have made good progress over the last four months, with demand in our
drainage, storm water and ventilation markets holding up well, supported by
structural and sustainability growth drivers. Our continued focus on
simplifying the business and driving operating efficiencies means that we are
well positioned to navigate the current uncertain environment and benefit from
incremental margin improvement when volumes return to more normal levels."

 

 

Strategy Progress Update

 

The Group will hold a Strategy Progress Update for investors and analysts at
Deutsche Numis in London on 22 November 2023 at 13.30 GMT.

 

 

Enquiries:

 

Genuit Group plc

 

Joe Vorih, Chief Executive Officer

Tim Pullen, 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 products 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 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.

END

 

______________________________________________________________________________
(1) Genuit compiled analyst consensus forecasts for 2023 show Adjusted
Operating Profit of £89.7m

(2) Like-for-like as adjusted for acquisitions and disposals. Group revenue
including Polypipe Italia £6.5m

(3) Greater than 20% Adjusted Operating Margin over the mid-term

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