Eurocell is one of the UK fenestration sector’s largest companies to trade on the stock exchange, and at the end of last week they provided their latest trading update. In comparison to the last few from other publicly traded companies, this is some pretty good news.
The update
This was the full statement from Eurocell:
Eurocell provides an update on its trading performance for the first four months of 2018, in advance of our Annual General Meeting being held at 12 noon today in Alfreton. Trading and Operational Performance We have made a positive start to 2018 and current trading is consistent with our expectations for the full year.
We continue to deliver good sales performance. In the Profiles division, growth reflects new account wins from 2017 and a strong performance in new build. In Building Plastics, growth has been driven by the branches opened last year. Although we expect sales growth rates to be similar throughout the year, as anticipated there will be a greater phasing of profit to the second half.
We continue to make good progress with our key strategic initiatives, which include:
Branch network – implementing initiatives to shorten time to break-even and maturity, and ensure a consistent offering across the network. On track to open up to 15 new branches in 2018, with 4 new sites so far this year.
Recycling – use of recycled material increasing as planned.
Market share – new customer prospect pipeline remains strong.
Acquisitions – continuing to explore potential bolt-on acquisitions.
Our focus for 2018 remains on growing market share, optimising our existing branch network and expanding further our recycling capability. We are in a strong financial position and, notwithstanding the impact of difficult weather conditions in the first four months, look forward to delivering another year of good progress, in line with expectations.
Notice of Results: We will announce our half year results for the six months ending 30 June 2018 on 2 August 2018.
Analysis
That is solid statement from Eurocell there. It can be easy for big business to become stagnant and hope momentum changes things rather than themselves being proactive in order to being results. And as we know, Eurocell is a very wide ranging company, which is able to serve all sorts of the fenestration sector as well as other aspects of home improvement.
Be it through profiles, trade counters, outdoor living, roofs or something else, Eurocell is able to serve almost any trade anything. This is what has allowed them to perform better than most other big business in our sector. Diversification has worked a treat for them, and this trading update shows it.
They want to expand their branch network by opening 15 more this year. They say they have opened four already. We’re nearly at the halfway point in the year, so they will have to step it up a gear to get the 11 others opened before the year is out. But they already have a pretty extensive network, so if they miss the mark on that one I doubt it will be all that disappointing.
The thing that stands out for me however is their mentioning of acquisitions. A clear hint that the company continues to look for other ways to increase their market share or break into new ones buy purchasing other companies already operating in their own particular markets. My guess is that there will be some companies already on their shopping list. Which ones I don’t know. Perhaps other trade counters which would allow them to expand their branch network as previously mentioned?
Overall though, this is a trading update which shows well that when you diversify and become able to service lots of demographics, instead of staying put and becoming restrictive, business can perform very well. Lets not pretend that the UK economy remains a challenging environment out there. It’s patchy at best, so any company, big, medium or small, who is able to boast positive updates and growth should be proud of that. There are plenty of others out there struggling right now, with some big names in the mix. Hopefully others are looking at what Eurocell are doing and will look to apply some of the same methods.
For those companies who trade on the stock market, or give regular trading updates to investors, I would be happy to publish your results on DGB. Please email me on info@doubleglazingblogger.com for more details.Â
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