Genuit plans CEO change amid ‘robust’ start to year

Doncaster-based piping and ventilation systems firm Genuit Group plc — which recently changed its name from Polypipe Group — said on Thursday its CEO Martin Payne will step down next year as it reported a “robust” start to the year.

The news was contained in a trading update for the four months ended April 30, 2021, to coincide with its AGM.

Genuit said it now expects underlying operating profit to be “close to the top end of the current consensus” because of stronger than anticipated revenue growth.

Underlying operating profit consensus is £85 million with a range of £80 million to £88 million.

Genuit shares rose about 5%.

The company also announced the appointment of Matt Pullen as chief operating officer (COO) with effect from November 1, 2021.

Pullen will join Genuit Group’s board from British Gypsum, a part of the Saint-Gobain Group, where he served as managing director since 2018.

“For ease of comparison, the current year’s financial performance is compared to the comparative trading period for 2019, which excludes the distorting effect of the onset of the Covid-19 pandemic in March 2020,” said Genuit.

“Group revenue for the four months ended 30 April 2021 was £193.0m (2020: £122.7m, 2019: £146.6m), 31.7% higher than the same period in 2019.

“On a like-for-like basis excluding the impact of acquisitions, revenue was 13.5% higher than 2019.

“Margin performance has been broadly in line with expectations, buoyed by strong operating leverage.

“The group has also seen stronger than expected cash generation.

“Residential Systems revenue, representing 63% of group revenue, was 43.8% higher than the same period in 2019, helped by the acquisitions of Adey and NuHeat that were both acquired in February 2021.

“Revenue during the period was also partially boosted by merchants forward purchasing ahead of price increases.

“Within new housebuilding, new starts year to date have been particularly strong.

“There are ongoing challenges associated with the supply of raw materials and components but thus far we have been able to maintain manufacturing output as a result of the scale and flexibility of our operations.

“As a consequence our material costs have increased but sales prices have been increased accordingly.

“Commercial and Infrastructure Systems revenue, representing 37% of group revenue, was 15.3% higher than the same period in 2019, driven by the continued success of new product launches and the acquisition of Plura in February 2021.

“The three acquisitions completed in February 2021 are all performing well, with Adey so far exceeding expectations. The integration of these businesses is proceeding according to plan.”

Genuit CEO Martin Payne said: “The group has delivered a positive performance so far this year as well as completing the acquisitions of Adey, NuHeat and Plura.

“The strength of trading conditions and that of the structural growth markets we operate in, leads the board to expect that these improved trends will continue for the remainder of the first half of this year.

“There is some remaining uncertainty about how the pandemic will evolve, but the board believes the group is in a strong position to make continued progress in the current year.”

Genuit said CEO Payne will leave the group “during the first half of 2022, to support an orderly transition, after leading the business for five years.”

“The board is commencing a process to appoint a successor and the company will provide an update as and when appropriate,” said the firm.

Genuit chairman Ron Marsh said: “Martin has implemented a strategy to develop the group into the broader water and climate management solutions markets, including six acquisitions, the most recent of which was the £210m acquisition of Adey.

“He leaves the group in a strong position in growing markets with sustainability at its core.

“Following a recent successful re-branding to Genuit Group plc, the group continues to capitalise on the opportunities ahead. We wish Martin well for the future.”

Payne said: “I am very proud to have been part of the team over the last five years and am pleased to be leaving Genuit Group in such a strong position.

“In our separate trading update today, we have seen a robust start to the year, with our positive performance testament to the tireless and successful work of our experienced team.

“I wish everyone at Genuit every success for the future and I look forward to working with the board to ensure a smooth transition to my successor.”