Eurocell, a leading U.K. manufacturer of window, door, and roofline PVC products, has announced that its sales for the first half of the year have experienced a 2% decline. This dip can be attributed to reduced repair, maintenance, and improvement activity, as well as a weaker new build market. Despite these challenges, Eurocell has maintained its full-year guidance and expects a stronger performance in the second half of the year.
While the company has noted that volumes for repair, maintenance, and improvement (RMI) projects within its branch network have remained steady, they have been somewhat subdued. This is due to increased competition in the market and limited demand, which has put pressure on margins.
To address these market conditions and improve efficiency, Eurocell underwent a restructuring process in the fourth quarter of the previous year. As part of this restructuring, the company reduced its workforce, leading to cost savings of £9 million ($11.5 million) per year. £2 million of these savings is expected to be realized in the second half of this year.
As a result of the restructuring and job cuts, Eurocell will incur a charge of £2 million in its half-year accounts.
Looking ahead to 2023, Eurocell anticipates a shift towards a heavier sales weighting in the second half of the year. The company expects sales to return to a more typical seasonal pattern, with profits benefiting from lower input prices, including raw materials and hedged electricity. Eurocell has already implemented operational cost savings, further contributing to its anticipated profitability.