It is more than likely that Alumasc, the premium sustainable building products, systems and solutions group, will provide a Trading Update ahead of its Annual General Meeting, to be held tomorrow morning.
Alumasc is a UK-based supplier of premium sustainable building products, systems, and solutions.
Some 80% of group sales are driven by building regulations and specifications (developers/housebuilders, architects, and structural engineers) because of the performance characteristics offered.
The group has three business segments, with strong positions and brands in their individual markets: Building Envelope; Water Management; and Housebuilding Products.
On Tuesday 3rd September, when commenting on the group’s end-June Final Results, CEO Paul Hooper stated that:
"We are extremely pleased to report a further upgrade to our 2024 profit, with underlying profit before tax of £13.0m, 16% ahead of the prior year.
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.
Sustainability is at the core of what the construction industry needs to do to address climate change and the Group is well placed to benefit from these long-term growth drivers.
This environmental focus, together with an effective commercial strategy, has enabled us to continue to outperform the wider UK construction market.
Since we completed the strategic acquisition of ARP Group and welcomed our new colleagues, the business has performed extremely well, bringing exciting synergies and opportunities for cross-selling to the business.
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."
Broker’s View
Analyst David Buxton at Cavendish Capital Markets has an upgraded Price Objective out on the group’s shares at 330p (315p).
His current year estimates to end-June 2025, are for revenues to rise to £110.5m (£100.7m), while adjusted pre-tax profits could improve to £14.2m (£13.0m), with earnings of 29.4p (26.6p) and a dividend of 11.0p (10.8p) per share.
He considers that there is a significant opportunity for the group’s shares to continue outperforming, with a strong scope for a re-rating closer to sector average valuations.
My View
In late July this year, I stated that as far as I saw it, the shares of this group, then at 213p, represented a great opportunity to participate in the envisaged boom to come within the housebuilding and construction sector under the new Government proposals.
Since then, they have been up to 309p and are now trading at around the 265p level, and looking very appealing – so let us hope that tomorrow’s AGM Trading Update gives out very positive waves.
Surely, they are going higher?
(Profile 13.02.20 @ 116p set a Target Price of 145p*)
(Profile 08.06.20 @ 80p set a Target Price of 105p*)
(Profile 10.01.24 @ 183p set a Target Price of 222p*)
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