Consistent Polypipe shrugs off price rises

BY THOMAS BLARD

Growing demand for plastic pipes and fittings helped Polypipe shrug off recent increases in raw material prices to announce interim results ahead of expectations. The company said the second half had begun well.

Kevin McDonald, chairman, who has overseen a consistent rise in profits since 1985, said of rising input prices: "It has never been a problem in the past."

The result was driven by plastic pipes and fittings, Polypipe's core division and its most profitable activity, in which operating profits grew by 25 per cent. The remaining domestic plastic products saw growth of 6 per cent despite rising sales.

Overall, turnover increased 39.4 per cent to £84.7m from £60.8m and pre-tax profits rose a quarter to £9.3m. Earnings per share rose 24 per cent to 3.98p and an interim dividend of 0.81p will be paid on 25 April.

The market welcomed the figures, pushing the shares, which have doubled over the past five years, 4p higher to 126p. Kevin Cammack, analyst at Smith New Court, expected pressure on margins to ease in the second half because Polypipe had covered forward, buying its raw material requirements until the end of May. Analysts expect profits of at least £25m for the year.