Polypipe H1 hit by Covid-19 but trading improving

Polypipe reported a decline in first-half profit and revenue on Tuesday as it took a hit from the coronavirus pandemic, but struck a more upbeat note on recent trading.

In the six months to the end of June, pre-tax profit slumped 92.7% to £2.3m on revenue of £173.6m, down 22.3% from the first half of last year. Basic earnings per share declined 94.6% to 0.7p and the company did not declare an interim dividend.

Polypipe said that overall, the first quarter was broadly in line with 2019, with nearly all of the impact of Covid-19 occurring in the second quarter.

"At its deepest point, trading in April 2020 was 66% below the prior year across both segments," it said.

"Since there has been an improving trend with June trading at a level 19% below that of June 2019. This improvement is somewhat ahead of the scenario modelling we conducted in preparation for the equity raise at the beginning of May where we forecast that the low level of trading experienced then would continue until June with a recovery only starting in the second half of the year."

The company said trading since the end of the first half has continued to recover, with July and August revenue 6% and 3% below 2019 levels, respectively.

Polypipe also said it will consider paying a final dividend for 2020 in May 2021 as long as it continues to perform ahead of the operating scenario set out at the time of its equity raise in May.

Chief executive officer Martin Payne said: "The group has traded robustly through the crisis with continued improvement in trading in recent months. The early actions we took to secure liquidity have positioned the group to be able to capitalise on opportunities as they arise during the recovery, as well as continue investing in new product development in line with our strategy."