The FTSE 250 company, which makes plastic gutters and wastewater pipes, enjoyed an “encouraging” start to 2019 after upping its prices.
But performance in May and June was impacted by merchant destocking, as companies looked to run down the stockpiles they had built up in the run-up to March’s original Brexit departure date.
Analysts at Peel Hunt said they would be trimming their full-year revenue forecasts by between 1-2% on the back of the update. The number crunchers left their profit expectations unchanged, as cost-cutting offsets the top-line slowdown.
With Britain’s exit from the European Union now set for 31 October, builders’ merchants are starting to rebuild their stock levels, which has boosted sales in the opening six weeks or so of the second half.
Robust first half
Revenue in the first half climbed 6% to £223.3mln in the six months ended 30 June (H1 18: £210.2mln), while pre-tax profits rose 4.3% to £31.4mln (H1 18: £30.1mln).
“The business has performed well in the first half with good revenue growth and improved margins through selective cost reductions and acquisitions,” said chief executive Martin Payne.
“The medium-term fundamentals of our markets remain strong. Whilst we are mindful of current political and economic uncertainty, management continues to focus on self-help measures and together with an encouraging start to the second half, the board's profit expectations for the year remain unchanged.”
Shares were down 1.2% to 398.4p in early deals on Tuesday. Despite today’s fall, the stock is still up by 20% since the beginning of the year.