Genuit Group Feedback from Management Fireside

研报英文原文证据摘录

Genuit Group Feedback from Management Fireside

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problems (e.g. leaks, floods), so builders are reluctant to skimp here. Pricing

is therefore neither a visible nor a significant factor, giving Genuit strong Specialist Sales contact details:

pricing power. Genuit also has strong market share which further enables the Sam Edmunds - Specialist Sales -

company to pass these price increases through to customers effectively. European Industrials

Additionally, best-in-class sourcing agreements deliver greater supply security (44-20) 7742-8733

sam.edmunds@jpmorgan.com

and preferred pricing. Over 50% of plastic is sourced as recycled material,

which acts as a further cost mitigant.

• Pricing in a Deflationary Scenario. The business is project-related; freight

charges adjust accordingly, but the price increases implemented are stickier. In

a deflationary environment, there would be a lag in price reductions (the link

to polymers is not straightforward, as different polymers deflate at different

rates). Management will work with customers if prices fall. Revenues may take

a small hit, but profitability should be protected as margins are maintained.

• Margins – Path to 20%. The business is currently operating at ~25% lower

volumes, yet margins have held up well. This is also despite wage inflation.

Genuit is able to accelerate the reduction of £4–5m of annualised costs via the

simplification programme, with continuous cost improvement driven by the

Genuit Business System (GBS). Both cost reduction and volume recovery will

support margin expansion, with any additional catalysts accelerating progress.

An increase in volumes would translate into a meaningful margin uplift, but

management intends to reach 20% margins regardless of a material volume

recovery.

• UK Outlook.