Sustainable construction supplier Genuit has posted a near halving of its profit for the first half of 2024 and said it expected “subdued” market conditions to persist for the rest of the year.
The FTSE 250 maker of drainage, air conditioning and heating systems reported on Tuesday that its statutory pretax profit dropped to £15.3m in the six months, from £29.7m during the same period in 2023.
On an underlying basis, the firm reported a 6.7 per cent year-on-year fall in pretax profit to £37.6m.
Genuit’s revenue dropped 10.6 per cent on last year to £272.4m, from £304.8m. Its water business saw revenue fall 11.4 per cent, which the firm partly blamed on wet weather and delayed project starts.
The group’s sustainable building unit suffered a 12.6 per cent drop in revenue, which Genuit said was driven by “lower market volumes”.
Still, Genuit highlighted a 60 basis point year-on-year improvement in its underlying operating margin, which it said reflected factors like normalising cost inflation and the completion of its “business simplification programme”.
The firm proposed a dividend of 4.1p per share, unchanged from the same period last year.
“Whilst the market remains subdued in 2024, the group demonstrated continued operating margin improvement in the first half over prior year, as the benefits of our strategic actions continue,” said chief executive Joe Vorih.
“As we look forward into the second half, we currently anticipate these market conditions to remain, offset by continued operational and strategic progress.”
Vorih added that Genuit continued to expect its full-year underlying operating profit to come in within the existing range of analyst estimates.
“The Genuit Group is exceptionally well positioned to benefit from eventual market recovery, with business simplification complete, at least 20 per cent available capacity to ramp production and improved operational gearing providing confidence in medium term targets,” he added.
Earlier this month, Genuit announced it had acquired Sky Garden Limited, Omnie and Timoleon for a combined £5.2m. It said on Tuesday that a reduction in net debt provided “strategic optionality for further M&A”.
Genuit’s share price has risen 16 per cent so far this year.