Eurocell hit by costs despite strong sales
18th December 2018

Eurocell PLC says it expects annual earnings to be below 2017 due to increases in manufacturing and distribution costs, despite strong sales growth throughout all areas of its business. Revenue for the 11 months to November 30 was up 11% year-on-year, excluding acquisitions, it announced in its report this week.

Its Profiles division was boosted by a good performance from new build and trade fabricators, as well as new account wins, while in its Building Plastics division of trade outlets, branches opened in the last two years continued to mature.
The group reports that manufacturing efficiency has been improved through: “An increase of 25% in new co-extrusion capacity, recruitment of additional trained labour resource in the foiling plant and investment in new tooling for key products, with delivery due in Q2 2019.”

It continues that ‘a significant mix change’ has continued to impact the efficiency of manufacturing operations over the second half with the result that the increased manufacturing and distribution costs noted in the first half have continued into the final quarter.

The group also says it has introduced a programme of stockpiling to protect against the possibility of raw material supply interruption due to Brexit.

Eurocell now anticipates adjusted earnings before interest, taxes, depreciation, and amortization to be lower than in the prior year. In 2017, Eurocell reported adjusted Ebitda of GBP31.7 million.

The company will report its annual results on March 15.