03.02.2025
Tomorrow morning will see The Alumasc Group (LON:ALU) announce its Interim Results for the six months to end-December 2024, they should be more than positive and help to identify just how attractive its shares are at the current 292.50p.
I am looking for the group to point to its current year sales to continue the growth shown over the previous six years.
The Business
Based at Burton Latimer in Northamptonshire, this £106m capitalised group is a sustainable building products, systems and solutions business.
With over 90% of group sales made into the UK market, its operating segments include Water Management, Building Envelope and Housebuilding Products.
The group’s brands include Alumasc, Alumasc Skyline, Alumasc Rainwater, Harmer, Wade, Gatic, Roof-Pro, Alumasc Roofing, Blackdown and Timloc.
Alumasc Water Management Solutions, representing some 47.98% of group sales, provides its customers with rainwater and drainage products that capture, retain and control the flow of rainwater inside and outside buildings from origination source to water course, sewer or ground.
The group’s Building Envelope segment, (37.34%), offers customers a range of roofing products while also providing technical advice, service and environmental credentials.
In the Housebuilding Products segment, (14.71%), the company manufactures products for housebuilding made from recycled and recyclable materials.
Last Trading Update
Ahead of the group’s 2024 AGM, it issued a Trading Update indicating that the positive trading momentum had continued into the first quarter of the financial year ending 30th June this year.
It stated that, against a challenging backdrop in the commercial construction markets, it had continued to outperform its sector through its strategic focus on sustainable building products and solutions, growing sales through customer service and innovation, and targeted export opportunities.
Supported by continued disciplined management of working capital in the first three months of the financial year, the group stated that its balance sheet and cash generation had remained strong.
Despite demand headwinds in its key markets, which were expected to have persisted to the end of 2024, in line with its expectations the Board had confidence in the delivery of another year of growth.
CEO Paul Hooper stated that:
"I am pleased that our strong trading momentum has continued into the new financial year.
We continue to demonstrate our ability to outperform our commercial markets, through execution of our proven strategy.
With strong foundations and a clear line of sight to deliver our medium-term ambitions, we remain well positioned to deliver significant shareholder value."
The Equity
The group has 36,133,558 shares in issue.
Its list of larger holders include Hargreaves Lansdown Asset Management (7.08%), Charley Stanley Investment Management (5.05%), AXA Investment Managers (4.98%), Graham Hooper (2.93%), Chelverton Asset Management (2.57%), Maitland Asset Management (2.46%), Teviot Partners (1.44%), Castlefield Investment Partners (1.38%), Fortezza Finanz AG (1.11%) and HSBC Global Asset Management (1.08%).
Analyst View
At Cavendish Capital Markets, analyst David Buxton has a Price Objective on the group’s shares of 410p.
His estimates for the current year to end-June 2025 are for increased revenues of £110.5m (£100.7m), with adjusted pre-tax profits of £14.2m (£13.0m), earnings of 29.4p (26.6p) and a dividend of 11.0p (10.8p) per share.
For the year to end-June 2026 his current estimates are for £116.4m in sales, £15.3m of profits, 31.4p of increased earnings and a dividend per share of 11.3p.
In My View
With its shares now at 302.50p, Alumasc looks to me to be a ‘sustainable’ growth stock, never going to set the world alight but being a good steady performer – ideal as a base stock in any portfolio.
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