LSE:PLP

Stock Analysis Report

Executive Summary

Polypipe Group plc, through its subsidiaries, designs, develops, and manufactures plastic piping systems, water management solutions, and climate management solutions in the United Kingdom, other European countries, and internationally.

Rewards

Earnings are forecast to grow 7.86% per year

Earnings grew by 10.4% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Proven track record with mediocre balance sheet.


Similar Companies

Share Price & News

How has Polypipe Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PLP has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

5.3%

PLP

1.8%

GB Building

-1.1%

GB Market


1 Year Return

43.7%

PLP

28.8%

GB Building

12.7%

GB Market

Return vs Industry: PLP exceeded the UK Building industry which returned 27.1% over the past year.

Return vs Market: PLP exceeded the UK Market which returned 12.7% over the past year.


Shareholder returns

PLPIndustryMarket
7 Day5.3%1.8%-1.1%
30 Day2.6%2.7%0.07%
90 Day23.4%19.6%6.2%
1 Year48.0%43.7%33.2%28.8%18.6%12.7%
3 Year77.6%63.0%31.5%19.5%21.8%6.3%
5 Year159.2%127.0%73.6%48.1%42.5%9.6%

Price Volatility Vs. Market

How volatile is Polypipe Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Polypipe Group undervalued compared to its fair value and its price relative to the market?

22.1x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: PLP (£5.11) is trading above our estimate of fair value (£4.72)

Significantly Below Fair Value: PLP is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: PLP is poor value based on its PE Ratio (20.4x) compared to the Building industry average (16.8x).

PE vs Market: PLP is poor value based on its PE Ratio (20.4x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: PLP is poor value based on its PEG Ratio (2.6x)


Price to Book Ratio

PB vs Industry: PLP is overvalued based on its PB Ratio (3x) compared to the GB Building industry average (1.7x).


Next Steps

Future Growth

How is Polypipe Group forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

8.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PLP's forecast earnings growth (7.9% per year) is above the savings rate (0.5%).

Earnings vs Market: PLP's earnings (7.9% per year) are forecast to grow slower than the UK market (11.7% per year).

High Growth Earnings: PLP's earnings are forecast to grow, but not significantly.

Revenue vs Market: PLP's revenue (4.6% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: PLP's revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PLP's Return on Equity is forecast to be low in 3 years time (15.3%).


Next Steps

Past Performance

How has Polypipe Group performed over the past 5 years?

19.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PLP has high quality earnings.

Growing Profit Margin: PLP's current net profit margins (11.2%) are higher than last year (11%).


Past Earnings Growth Analysis

Earnings Trend: PLP's earnings have grown by 19.2% per year over the past 5 years.

Accelerating Growth: PLP's earnings growth over the past year (10.4%) is below its 5-year average (19.2% per year).

Earnings vs Industry: PLP earnings growth over the past year (10.4%) exceeded the Building industry 1.4%.


Return on Equity

High ROE: PLP's Return on Equity (14.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Polypipe Group's financial position?


Financial Position Analysis

Short Term Liabilities: PLP's short term assets (£162.6M) exceed its short term liabilities (£107.7M).

Long Term Liabilities: PLP's short term assets (£162.6M) do not cover its long term liabilities (£242.2M).


Debt to Equity History and Analysis

Debt Level: PLP's debt to equity ratio (64.9%) is considered high.

Reducing Debt: PLP's debt to equity ratio has increased from 52.1% to 64.9% over the past 5 years.

Debt Coverage: PLP's debt is well covered by operating cash flow (34.6%).

Interest Coverage: PLP's interest payments on its debt are well covered by EBIT (10.6x coverage).


Balance Sheet

Inventory Level: PLP has a high level of physical assets or inventory.

Debt Coverage by Assets: PLP's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

What is Polypipe Group's current dividend yield, its reliability and sustainability?

2.09%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%1.8%markettop25%5.0%industryaverage2.8%forecastin3Years2.4%

Current dividend yield vs market & industry

Notable Dividend: PLP's dividend (2.27%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: PLP's dividend (2.27%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, PLP has been paying a dividend for less than 10 years.

Growing Dividend: PLP's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (47.5%), PLP's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PLP's dividends in 3 years are forecast to be well covered by earnings (41% payout ratio).


Next Steps

Management

What is the CEO of Polypipe Group's salary, the management and board of directors tenure and is there insider trading?

2.4yrs

Average management tenure


CEO

Martin Payne (53yo)

2.3yrs

Tenure

UK£975,000

Compensation

Mr. Martin K. Payne has been Chief Executive Officer of Polypipe Group plc since October 2, 2017. Mr. Payne served as Chief Financial Officer of Polypipe Group plc since May 25, 2016 until October 2, 2017. ...


CEO Compensation Analysis

Compensation vs Market: Martin's total compensation ($USD1.27M) is below average for companies of similar size in the UK market ($USD1.85M).

Compensation vs Earnings: Martin's compensation has increased by more than 20% in the past year.


Management Age and Tenure

2.4yrs

Average Tenure

53yo

Average Age

Experienced Management: PLP's management team is considered experienced (2.4 years average tenure).


Board Age and Tenure

2.3yrs

Average Tenure

53yo

Average Age

Experienced Board: PLP's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Glen Sabin (61yo)

    COO & Executive Director

    • Tenure: 2.3yrs
    • Compensation: UK£570.00k
  • John Fairhurst (75yo)

    Senior Director of Polypipe Group

    • Emma Versluys

      Group Legal Counsel & Company Secretary

      • Tenure: 2.6yrs
    • Martin Payne (53yo)

      CEO & Executive Director

      • Tenure: 2.3yrs
      • Compensation: UK£975.00k
    • Mark Hughes (48yo)

      Managing Director of Polypipe Civils

      • Tenure: 6yrs
    • Simon Howard (51yo)

      Managing Director of Polypipe Terrain

      • Tenure: 6yrs
    • Paul James

      CFO & Executive Director

      • Tenure: 1.8yrs
      • Compensation: UK£524.00k

    Board Members

    • Mark Hammond (51yo)

      Independent Non-Executive Director

      • Tenure: 5.8yrs
      • Compensation: UK£46.00k
    • Ron Marsh (68yo)

      Independent Non-Executive Chairman of the Board

      • Tenure: 4.7yrs
      • Compensation: UK£143.00k
    • Paul Dean (58yo)

      Senior Independent Director

      • Tenure: 4.7yrs
      • Compensation: UK£64.00k
    • Glen Sabin (61yo)

      COO & Executive Director

      • Tenure: 2.3yrs
      • Compensation: UK£570.00k
    • Lisa Scenna (51yo)

      Non-Executive Director

      • Tenure: 0.3yrs
    • Louise Hardy (52yo)

      Non-Executive Director

      • Tenure: 1.6yrs
    • Martin Payne (53yo)

      CEO & Executive Director

      • Tenure: 2.3yrs
      • Compensation: UK£975.00k
    • Paul James

      CFO & Executive Director

      • Tenure: 1.8yrs
      • Compensation: UK£524.00k
    • Louise Brooke-Smith

      Non-Executive Director

      • Tenure: 0.3yrs

    Company Information

    Polypipe Group plc's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Polypipe Group plc
    • Ticker: PLP
    • Exchange: LSE
    • Founded: 1980
    • Industry: Building Products
    • Sector: Capital Goods
    • Market Cap: UK£1.109b
    • Shares outstanding: 200.26m
    • Website: https://www.polypipe.com

    Number of Employees


    Location

    • Polypipe Group plc
    • Broomhouse Lane
    • Edlington
    • Doncaster
    • South Yorkshire
    • DN12 1ES
    • United Kingdom

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    PLPLSE (London Stock Exchange)YesOrdinary SharesGBGBPApr 2014
    0P5DB (Deutsche Boerse AG)YesOrdinary SharesDEEURApr 2014
    PLPLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPApr 2014

    Biography

    Polypipe Group plc, through its subsidiaries, designs, develops, and manufactures plastic piping systems, water management solutions, and climate management solutions in the United Kingdom, other European countries, and internationally. The company offers above and below ground drainage pipes; cable protection, sewer system, surface water drainage, water management, and mining pipes; water and gas distribution pipes; pressure systems; underfloor heating pipes and manifolds, underfloor heating controls, red floor panels, overlay systems, suspended floor systems, clip rail systems, and staple systems; and ventilation systems, including rigid ducts, radial products, decentralized mechanical extract ventilation, intermittent extract fans, mechanical ventilation with heat recovery, and mechanical extract ventilation systems. The company offers its products for use in the residential, commercial, civil, infrastructure, and public non-housing sectors. Polypipe Group plc was founded in 1980 and is based in Doncaster, the United Kingdom. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/25 22:44
    End of Day Share Price2020/01/24 00:00
    Earnings2019/06/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.