19
November 2024
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 2024. The Company will report its full year results for the
twelve months ending 31 December 2024 in March 2025.
Key
Highlights
· Resilient performance, despite subdued market
conditions
·
Strong strategic progress in
the period, with the Genuit Business System continuing to build
momentum and delivering margin progression despite lower
volumes
· Continued strong cash generation, with a debt reduction of £5
million since the end of June
· Market
conditions are expected to remain subdued through the remainder of
2024 and into 2025. As a result, the Board expects full year
underlying operating profit to be broadly in-line with the lower
end of analyst expectations1
·
Notwithstanding near-term
trends, Genuit is well placed to benefit from the eventual market
recovery and the structural growth drivers to which the Group is
exposed
Current trading and Business
Update
The Group's trading performance has
been resilient since the interim results were reported in August.
In the four months ended October 2024, revenue is down 1.8% versus
prior year on a like-for-like basis.
Group revenue for the ten months
ended 31 October 2024 was £471.7 million (2023: £504.2 million),
6.4% lower than the prior year on a reported basis and 7.1% lower
than prior year on like-for-like basis2.
·
Climate Management Solutions
(CMS) revenues were up 1.7% year on year on a like-for-like basis
for the four months ended October 2024. This performance was driven
by strong demand in the residential sector of Nuaire's ventilation
business and an encouraging improvement in sales at Adey in
September and October. Year to date revenues of £135.4 million on a
reported basis, represent a year-on-year reduction of 2.6%, with
residential ventilation strength being offset by subdued commercial
ventilation sales and softness in the market for boiler sales
affecting Adey.
·
Water Management Solutions
(WMS) revenues were down 4.9% on a like-for-like basis for the four
months ended October 2024. Year to date revenues of £137.7 million
on a reported basis, represent a year-on-year reduction of 7.4%, as
a result of several project delays in an uncertain business
environment.
·
Sustainable Building Solutions (SBS) sales were
down 2.0% on a like-for-like basis for the four months ended
October 2024. Year to date revenues of £192.3 million on a reported
basis, represent a year-on-year reduction of 8.4%, as a result of
subdued new housebuilding and RMI activity. The business unit has
made strong progress in winning new business in the period,
following the withdrawal of a competitor from the UK market, with
additional revenues expected in 2025.
· The two
recent acquisitions of Sky Garden and Omnie & Timoleon
contributed £3.5m of revenue in the four months to October 2024.
The integration of these businesses is proceeding as planned and as
expected, do not materially affect profitability in
FY24.
· The Group has
continued to focus on the deployment of the Genuit Business System
and is making good progress in achieving productivity improvements
that help mitigate the impact of lower volumes and increase
operational gearing of the Group to drive profitability as volumes
return to more normal levels.
Outlook
Underlying operating profit is
expected to be broadly in-line with the lower end of analyst
expectations1, with continuing operating margin progression.
Market conditions are expected to
remain subdued for the remainder of 2024 and into 2025. The Group
is assessing the impact of the recently announced increases in
employer National Insurance contributions and the National Minimum
Wage, which will add c.£5m to the Group's cost base in 2025. The
Group will seek to mitigate this through productivity and supply
chain improvements where possible, along with balanced price
management.
Whilst the timing of the eventual
market recovery is uncertain, the Group is encouraged by the UK
Government's commitment to significantly increase the levels of new
housebuilding and to the decarbonisation of the built environment.
The Group remains well positioned to capitalise on these structural
drivers. The Group remains highly cash generative and has a
strong balance sheet providing scope for strategic acquisitions.
Leverage is expected to be c.1.1x at the end of the
year.
Joe
Vorih, Chief Executive Officer, commented:
"Genuit has delivered a resilient
performance in the face of market conditions that have remained
subdued. Against this backdrop, we have made good progress with our
strategy and I am delighted the Genuit Business System has
continued to build momentum. Our focus on efficiency and
productivity continues to support strong margins despite lower
volumes.
In the near term, we expect the market
to remain subdued for the remainder of 2024 and into next year. We
are also working through the impact of cost increases relating to
employer National Insurance contributions and National Minimum Wage
on both our own business and the industry.
The economic and social imperative to
increase levels of construction and housebuilding in the UK has
never been stronger. At the same time, the need to decarbonise the
built environment and adapt to climate change remains clear. I am
confident that Genuit's portfolio of climate friendly, labour
saving, and energy efficient solutions will play a key role in
supporting sustainable growth in the coming
years."
______________________________________________________________________________
1 Genuit compiled analyst consensus forecasts
for 2024 show Adjusted Operating Profit of £92m to £94m
2 Like-for-like as adjusted for acquisitions and
disposals. Group revenue including Polypipe Italia
£6.5m
Enquiries:
Genuit Group plc:
Joe Vorih, Chief Executive
Officer
Tim Pullen, Chief Financial
Officer
+44 (0) 113 831 5315
Headland Consultancy:
Chloe Francklin
Matt Denham
Email:
genuit@headlandconsultancy.com
Telephone: 020 3805 4822
About Genuit Group plc
Genuit Group plc is the UK's largest
provider of sustainable water, climate and ventilation products for
the built environment. Genuit's solutions allow customers to
mitigate and adapt to the effects of climate change and meet
evolving sustainability regulations and targets.
The Group is divided into three
Business Units, each of which addresses specific challenges in the
built environment:
• Climate Management Solutions -
Addressing the drivers for low carbon heating and cooling, and
clean and healthy air ventilation.
• Water Management Solutions - Driving
climate adaptation and resilience through integrated surface and
drainage solutions.
• Sustainable Building Solutions -
Providing a range of construction solutions to reduce the carbon
content of the built environment.
Across these Business Units, Genuit's
brands are some of the most well-established and innovative in the
industry, including Polypipe, Nuaire and Adey.
The Group primarily serves
climate-driven building and construction markets in the UK, with an
expanding presence in Europe, the Middle East and North America and
sells to specific niches in the rest of the world.