A buoyant US housing market helped building products supplier Tyman (TYMN) to strong revenue and profit gains in the six months to 30 June.
Revenue at Tyman gained 3.8% at constant currencies and 14.8% after currency swings as increasing growth rates in its US-focused Amesbury Truth unit boosted results.
And underlying profit-before-tax at the windows and doors component manufacturer increased 18.9% to £24.5 million.
'We remain optimistic about the prospects for growth in the United States in both residential and commercial markets for the second half of the year,' Eperjesi said alongside interim results.
EU REFERENDUM
'Following the EU referendum the outlook for UK and European markets in the near term is less certain; however Tyman remains well positioned to make progress, even in uncertain markets, and we will continue to deploy our self help strategy and look to exploit opportunities as they arise.'
Shares flagged the potential for Tyman's North American business to deliver improved performance back in May after strong results from Builders FirstSource (BLDR:NDQ).
Accelerating growth in Amersbury Truth - it grew 1.8% in the year to 31 December and 5.8% in the last six months - will be supported further in the next six months by the acquisition of Bilco for $71 million (£55 million).
And growth in the US was also backed up by improved performance in Tyman’s other markets in the first six months of 2016, according to house broker Canaccord Genuity.
‘Tyman produced a strong set of first half results with a good margin performance,’ writes Canaccord’s Matthew Walker.
M&A STRATEGY
‘The US continues to grow well, with gradual recovery in Europe and as expected a more subdued market in the UK.
‘The group continues to benefit from its recent strategic acquisitions as well as self-help.
‘Leverage is comfortable and is expected to continue to move lower towards medium-term targets.
‘Momentum in US residential and commercial markets remains good, with gradual recovery expected in Europe.
‘UK markets are expected to slow down further post the Brexit vote and management will look to mitigate its impact with various self-help measures.
‘The results show a particularly good performance on pricing, cash-flow (good working capital management) and recent acquisition performance.’
UPGRADED FORECASTS
Walker upgraded a 2016 underlying profit-before-tax forecast from £53 million to £54.5 million following today’s results.
Estimates for 2017 profit-before-tax were also upgraded to £62.5 million, from £61.5 million.
Key risks at Tyman include high leverage and the cyclicality of its end markets.
Leverage increased from 1.8 times EBITDA at the period end to 2.4 times after the acquisition of Bilco on 1 July.
Cyclicality comes from Tyman’s exposure to construction markets in the US, UK and mainland Europe.
Shares in Tyman gained 1.1% to 282p after the results, valuing the business at £507 million.
