19 November 2019 – trading update

The leading provider of sustainable water and climate management solutions for the built environment has issued an update on trading for the 10 months ended 31 October 2019.  There has been resilient performance in difficult markets with revenue 4.3% higher at £381.7m (2018: £365.9m).  Operating margins were slightly higher, driven by margin accretive acquisitions and strong cost controls.  Acquisitions have continued to perform well and the M&A pipeline remains encouraging.  However, there has been flooding and poor ground conditions since the end of October, most notably in the North and the Midlands.  This means that contractors and developers have not been able to access sites for civils and groundworks activities.  As a result, underlying operating profit for the year is likely to be just below previous expectations.  The company remains highly cash-generative.  The share price has held up well given this news and we would now suggest that readers only BUY ON WEAKNESS.