Housebuilding activity gives Polypipe a lift

Strong housebuilding activity has boosted drainage manufacturer Polypipe’s trading performance in the past six months.

In a week when the Construction Products Association (CPA) warned that growth in the industry would slow to just 0.7% next year, Polypipe said it had seen “robust demand” from UK housebuilders in the first half of 2017.

The CPA said that growth next year would be heavily dependent on private housebuilding, although the sector was still too reliant on Help to Buy equity loans to drive housebuilding numbers.

Polypipe reported revenues from its residential pipework systems operation of £115m, up 9%, all of which was derived from the UK and Irish markets, accounting for 47% of total revenue for the six months to 30 June 2017.

The residential division posted underlying operating profits of £22.9m in the first half, up 6.5% year-on-year.

“Demand has remained robust from the national housebuilders throughout the first half, with particularly strong demand for our underground products as they continue to open new sites.

“As the housebuilders move through different build phases on site, demand is beginning to pick up in our above ground product ranges,” the firm added.

Polypipe said the UK repairs maintenance and improvement market was “static”, with housing transactions still muted and consumer confidence “impacted by post-election uncertainty and negative real wage growth”, while delays in some road projects had impacted its commercial and infrastructure operation.

The firm’s comments about the political landscape were in contrast to a more positive take on things from Bellway, which today said that customers’ appetite to purchase a new home had been unaffected by any uncertainty in the wider economy.