Downturn in second half for Wavin

Wavin, supplier of plastic pipe systems, have released an update of their current trading performance with a cautious outlook for the rest of the year.
The company saw sales grow 9.5% in the first nine months of 2007. However, after a sharp downturn in sales in Germany, Ireland and Denmark they predict full year revenue growth of about 7.5 – 8.5%.

In reference to the UK market the report stated: “In the important UK market, the company continues to deliver a good performance in an overall stable environment, which is mainly driven by renovation and non-residential building.”

However, the report goes on to say: “In Ireland, following many years of exceptionally high construction activity, new housing starts are dropping to more sustainable levels.

Despite the downturn Wavin expect net profits and earnings per share to be “well ahead” of last year.

Wavin ceo Philip Houben said: “The extremely positive Europe-wide market conditions which prevailed in the first half of the year have significantly turned in some European markets. This change has been more severe and persistent than earlier anticipated.

We continue to see steady progress in the UK, the Benelux and the majority of our other Western European countries, as well as double digit revenue increases in our Central European markets.

“However, in the second half year, we experienced a sharp downturn in Germany, Ireland and also Denmark. These three countries together account for 20% of our sales. As a result of this changing mix of market conditions, we no longer expect to achieve the 10% revenue growth guidance of our previous update.