Eurocell plc recorded 2022 sales up by 12% to £384million, with its profiles division leading the way at 15%, but signalled its aim of saving £5million in the coming year from a restructuring programme it completed last year in anticipation of weaker markets in 2023.
The group also revealed that it ‘expects to recognise’ a £1million-plus insurance compensation following a cyber-attack earlier in the year and is till in talks with the insurer ‘to resolve the remaining aspects of the claim’.
Group sales for the year ended 31 December 2022 were £384 million, up 12% compared to 2021. Divisional growth rates were as follows:
“Price was the driver of sales growth in 2022,” says the group, “Whilst we continue to offset input cost inflation with selling price increases and surcharges, we experienced margin pressure in the second half, reflecting a lag on implementing some selling price increases. However, the cost of key raw materials does now appear to be stabilising, and in some cases beginning to fall.”
In December, the group we sold the trade and assets of Security Hardware, a supplier of window locks, hardware and spares to the RMI market with annual third-party sales of c.£3 million, to UAP Limited, a UK-based door hardware supplier. Now UAP will supply hardware to all Eurocell branches.
As a result of the sale, we expect to report an overall loss from discontinued operations in the I“2022 financial statements of c.£2 million. This incorporates a trading loss for the period of c.£1 million (inclusive of costs incurred to prepare the business for sale), as well as the sale proceeds and associated asset impairments.
“Reflecting the factors described above, we expect underlying profit before tax from continuing operations for the year ended 31 December 2022 to be in line with market expectations, with the trading loss at Security Hardware of c.£1 million separately classified within discontinued operations.
Forecasting a weaker 2023, it continued: “We are mindful of the uncertain macro-economic background and its impact on our markets. The Construction Product Association’s latest forecast, published in November 2022, predicts declines in both the RMI and new build markets of 9% for 2023, before recovering in 2024, and we have experienced some recent weakness in those sectors.
“In anticipation of weaker markets in 2023, we completed a restructuring programme in Q4 2022, which along with other cost saving measures, will reduce operating costs by approximately £5 million per annum from the start of 2023. A charge of c.£2 million will be included as a non-underlying item in our 2022 financial statements in respect of the programme. We also intend to temporarily pause our branch opening programme until the economic outlook is clearer.
“However, we continue to take market share and have increased the run rate on new fabricator account acquisitions, with our pipeline of other potential new fabricator customers remaining healthy. Market share gains are further supported by the impact of maturing branches and a widening product range, all underpinned by very high product availability and increasingly efficient operations.”
