Alumasc LON:ALU the AIM-listed, Kettering-based sustainable building materials company published its full year results to end-June today (3rd September).
As previously reported, Alumasc has been a slow burner that had a volatile few years, however, post-UK general election things are looking up as one of the new government’s priorities is building new houses, and Alumasc should be set to be a beneficiary of this policy.
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The company was already on an upward curve and in the latest set of results it reported a 16.1% increase in underlying pre-tax profits to GBP13m, which came in ahead of expectations. Revenue was up 13% to GBP100m and the company saw a 6.5% increase in organic sales growth, despite the UK construction sector contracting by 2.9%.
ASC already contributing positively to group revenues
In the last year Alumasc was involved in the protracted acquisition of competitor, Leicester-based Aluminium Roofline Products (ARP), a manufacturer of gutters and drainpipes. This had started to contribute positively to the group’s revenues, adding a 6.5% contribution and the manufacturer is developing further cross-selling and purchasing synergies. However, the APR acquisition saw a net outflow of GBP8.5m representing a leverage multiple of 0.5x. Basic earnings per share was up year-on-year from 23.3p to 24.3p, with underlying earnings per share of 26.9p.
The company’s management is proposing a dividend of 7.3p/share, up from 6.9p/share contributing to a total dividend of 10.3p/share and the company has a medium-term dividend objective of 2.5x to 3x earnings cover.
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Alumasc has three core divisions: water management, building products and roofing. Each division has several brands specialising in various building solutions. The theme that is playing into Alumasc’s court is the sustainability of new development, and the manufacturer has positioned itself at the apex of the sustainable building materials spectrum in the hope that developers – forced to by new sustainability regulations – will make a beeline for the company’s range of products and solutions.
Divisional performance up even in tough conditions
The water management division, which benefited from the ARP acquisition, had a strong year, especially in the export sales division. Water management revenue was up 21% to GBP48.3m with divisional underlying operating profit of GBP7.2m an increase of 32% year-on-year. Alumasc’s building envelope division saw revenue up 9% and underlying operating profit up 13% to GBP4.6m.
Housebuilding profits had “[…] very strong performance against a very challenging new build housing market backdrop, driven by investment in new product development,” according to management. Revenue was up 1% to GBP14.8m with underlying profit of GBP3.8m, up 7%.
Paul Hooper, chief executive said in a statement to the market: “We are extremely pleased to report a further upgrade to our 2024 profit […] all three divisions saw organic revenue and strong profit growth, a result of continued delivery on our strategic priorities and Alumasc’s position as a market leader in the provision of sustainable products, which provide efficient solutions to the challenges presented by our changing climate.”
Hooper continued: “Alumasc’s performance against the backdrop of challenging markets during 2024 shows the business’s quality and as we progress into 2025, we have a clear line of sight of our ambitious growth plans, capacity to invest and opportunity to deliver significant shareholder value.”
Alumasc’s shares opened trading today at 262p up 71% from a year ago, and up 44% year-to-date with its shares ranging between 140p and 265p over a 52-week period. The company has a market capitalisation of GBP91.4m.
Alumasc is well-positioned
Alumasc’s strong performance in the face of challenging market conditions demonstrates the company’s resilience and strategic positioning. With its focus on sustainable building materials and a growing portfolio of innovative products, Alumasc is well-positioned to capitalise on the increasing demand for environmentally-friendly solutions in the construction industry. As the company continues to execute its growth plans and invest in research and development, investors can expect further value creation and long-term success.
