Half Year 2026 Eurocell PLC Earnings Call Transcript
Key Points
- Group revenues improved 6% to GBP205 million, with adjusted operating profit up 10% to GBP11.1 million.
- Sales momentum improved in Q2 and continued into H2, with organic sales up 4% in Q2 and July/August up 4-5%.
- Alunet performed strongly, with sales up 15% and operating profit of GBP4 million in H1, contributing to market share gains.
- Strategic initiatives drove growth, including windows and doors sales up 29% and e-commerce up 49%, with a strong EBIT margin of 16%.
- The acquisition of ATT for GBP5 million enhances the extended living strategy, capturing end-to-end margin and control.
- Strong balance sheet with leverage at 0.8 times EBITDA, good cash generation, and interim dividend increased 9%.
- Restructuring programs are expected to deliver over GBP5 million in annual savings, with GBP2 million realized this year.
- Eurocell is well-positioned for sustainability trends, with 100% renewable electricity and high recycled content in products.
- Profiles division sales declined 5% due to weak new build housing demand and challenging market conditions.
- Competitive pressure on selling prices in the branch network led to a net margin decline.
- Labor and overhead cost inflation, including pay awards and national insurance increases, negatively impacted profitability.
- Non-underlying charges of GBP9.6 million, including restructuring costs and ERP implementation, weighed on results.
- Organic volumes were only 1% up, with general RMI volumes down 2% as homeowners delayed discretionary spending.
- Garage doors sales declined marginally due to lower volumes in a highly competitive market.
- The company closed 10 branches and exited Ireland due to high costs and underperformance, reflecting ongoing challenges.
- Adjusted EPS growth was limited to 2% due to increased finance costs from the Alunet acquisition and share buybacks.
Hello everyone and welcome to Eurocell half year 2026 conference call. Please note that this call is being recorded. (Operator Instructions)
I'd now like to hand the call over to Will Truman, Chief Executive Officer. Please go ahead.
Thank you and welcome to Eurocell's 2026 half-year results presentation. I'm Will Truman, Chief Executive; and [I'm the] with Michael Scott, the Chief Financial Officer; and Mark Wooster, CFO Designate. This morning, I'll give you a brief overview of the half year before handing over to Michael, who will take you through the financial results in more detail before handing back to me for the strategy update. Mike will uncover the ERP upgrade, restructuring and ESG. I will then wrap up with a brief summary.
As you know, I was appointed in February of this year, and my reflection on the first half year's results is that we have made some good progress. Alunet has continued to trade in line with our expectations, and there has been an improvement
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