Half Year 2024 Eurocell PLC Earnings Call Transcript
Key Points
- Eurocell PLC (ECELF) reported a 33% increase in profits to GBP8 million despite challenging market conditions.
- The company successfully completed two share buybacks totaling GBP10 million and announced a third buyback of up to GBP5 million.
- Adjusted earnings per share increased by 30%, reflecting improved profitability.
- Net debt remains low at GBP4.3 million, with good headroom on the debt facility.
- The company is making good progress on strategic initiatives, including branch network expansion and increased e-commerce business.
- Revenues were down 5% with volumes 3% lower due to weak housing market and softer demand.
- Profile sales decreased by 9% with volumes 8% lower, reflecting weak markets.
- The company continues to experience competitive pricing pressure in the branch network.
- RMI activity is being hit by low consumer confidence and the residential construction market remains weak.
- The implementation costs for strategic IT projects are significant, with GBP0.4 million charged to the P&L in the first half and an estimated GBP3 million for the full year.
Thank you, and welcome, everyone. Thanks for joining us this morning. I'm Darren Waters, CEO; and onside me is Michael Scott, our CFO. So the headline level, I'm pleased to report that we delivered a decent first half performance with profits up 33% at GBP8 million despite a tough market environments. And if you cast your mind back to last year during the first half of 2023, we were impacted by the downturn in the newbuild market.
This year, we've experienced the combined effect of a weak housing market and a softer demand in our reminder. Even though the CPA are reporting a 6% fall in private RMI, my view is that the overall market is down as much as 10% versus 2023. So I think we've done well to mitigate that with a 5% drop in revenues, and that's largely as a result of the progress we are making on our strategic initiatives, and we'll cover that in more detail later in our presentation.
In July and August, we've seen some early signs of a slight pickup in demand from the housing market, which is obviously very welcome. And we're
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