ALUMASC GROUP PLC, the UK-based supplier of building products, has announced full year results with turnover and profit holding steady.

Group revenues were maintained at £89.1m, only very slightly down from 2022’s £89.4m, while underlying profit before tax from continuing operations is £11.2m, again falling from last year’s £12.7m.

The Kettering-based company says that delays in the new Chek Lap Kok Honk Kong airport project impacted performance, but that shipments started in July 2023. The recently announced intention (subject to CMA approval expected in the autumn) to acquire the ARP Group, a manufacturer of specialist metal rainwater and architectural aluminium goods, for £10m is expected to further diversify the business’ product base and add to revenue and profit this coming financial year.

The company reports a continued focus on operational margins and says it has “well invested operations and significant capacity headroom, including further investments in efficiency and capability”. It also expects an increased sales presence in new geographical markets will accelerate future export sales growth.

Divisional Performance

The divisional star performers of the year were Housebuilding Products and Building Envelope.

Water Management

While the Water Management division’s revenue reduced to £39.8m from last year’s £47.6m, and underlying operating profit fell to £5.8m following £8.8m the previous year, the company says UK sales remained strong and despite the challenging marketplace managed to move slightly ahead of the prior year.

Several large projects for Gatic Slotdrain and Access Covers were delivered and another good performance was achieved by the Architectural Aluminium business, Skyline, with a number of new products.

In the second half year, the new patented Slotdrain E was launched, designed to require much less concrete during installation while allowing faster installation. The first successful installation took place at the historic business jet facility at Farnborough Airport, and Alumasc anticipates strong demand for the new product.

Rainclear, reliant on self-build projects, had a slower performance this year, due to pressure on household income, the company says. It mitigated some of the shortfall through work with regional housebuilders plus the launches of its new canopy, veranda and skylight ranges, reportedly “showing early promise”.

The Water Management Division commences the new financial year with an order book over twice the size of a year ago.

Building Envelope

Alumasc’s Building Envelope division saw a solid performance from continuing operations, with 18% revenue growth to £34.6m, up from £29.4m in the previous year. Underlying operating profit was £4.1m, compared to the previous financial year’s £3.6m.

Growth in the year was driven by pro-active management including the hiring of very experienced and effective sales managers, Alumasc says. It has increased market share partly by new product launches, including a flat to pitched roof system, along with the successful promotion of its CO2 reducing product, Olivine.

The business says a good level of academy work was won and some significant cost increases were passed on through sales prices. The Roofing business continues to focus on high-end specification offers and long-standing relationships with key clients, developers and contractors, as well as increasing its influence in large scale (£1.0m+) projects, which  is benefitting the division.

Housebuilding Products

Housebuilding Products reported a 19% increase in revenue to £14.7m (FY22: £12.4m), with a 44% increase in underlying operating profit to £3.5m, up on 2022’s £2.4m.

Timloc, Alumasc’s housebuilding products business, had an outstanding year, growing its revenue 19% and its underlying operating profit by 44%. This was achieved by the next day delivery service and new products, which in 2022/23 accounted for approximately 25% of its revenue. It included the launch of the Inventive Tile Vent range which, Alumasc reports, has taken a significant market share during the year. The Inventive Tile Vents have also taken Timloc into a new distributor channel of specialist roofing merchants.

Timloc’s continued focus on sustainability, including being the first UK building products manufacturer to become carbon neutral, leaves it well positioned to support the housebuilders’ drive to build carbon zero homes, the company says. During the year, Timloc was the first Alumasc business to fully move to electric vehicles.

Despite the challenges of a weakening housing market and cost increases, which were largely recovered, operating margin was 24%.

Alumasc now plans further investments in operational capacity (including automation), external sales and new product development for continued growth.

Full Year Results

Paul Hooper, Chief Executive, said: “These full year results … demonstrate the Group’s resilience and benefits of our diversified portfolio of innovative, sustainable building products, against a challenging market backdrop.

“Strong organic growth was delivered in our Housebuilding Products and Building Envelope divisions. Inorganic growth is also being pursued with the proposed acquisition of ARP Group (subject to CMA approval). ARP will complement Alumasc’s business model, broadening our product range in the Water Management division and augmenting our routes to market. We are excited at the prospect of this transaction bringing attractive scaling opportunities for both businesses.

“As we enter FY24, we anticipate that short-term market conditions will remain challenging, but are confident that we have undertaken the right actions to manage these, while positioning the Group well for when markets normalise.”

Outlook

Alumasc says its outlook is buoyed by a healthy order book and that the new financial year has started in line with management’s expectations. The Water Management division expects to see a positive impact from the delayed Chek Lap Kok airport project contract in Honk Kong which will not get underway in 2024, with deliveries starting this year, as well as contributions from the ARP acquisition.

Alumasc says its diversified businesses, innovative products and demand for sustainable building products provide resilience. Its directors anticipate short-term market conditions will remain challenging, but are confident the Alumasc Group has taken actions to manage these, while the business remains well positioned to benefit when markets normalise.

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