Heating and cooling systems manufacturer, Purmo Group, has recently released its financial statement.
The report reveals that Purmo’s turnover experienced a decrease during the period of October to December, dropping from 206.6 million euros to 175.0 million euros. This figure aligns with the consensus forecast of 175 million euros, which was predicted by three analysts and gathered by Factset.
In contrast, the company’s adjusted EBITDA witnessed an increase during the same period, rising from 16.3 million euros to 21.1 million euros. This result slightly surpassed the analyst’s consensus of 20.8 million euros, with the forecast range being between 19.6 and 22 million euros.
Further details from the financial statement show that Purmo’s adjusted earnings per share improved from 0.04 euros to 0.15 euros during October to December. This figure echoed analyst expectations. However, the company’s reported losses deepened from 0.17 euros to 0.59 euros in the comparison period. These losses were a result of costs associated with a development program that the company is currently running.
For the entire year, the adjusted profit per share stood at 0.68 euros, an increase from 0.79 euros in 2022. The company’s board has proposed a return of capital equivalent to a dividend of 0.36 euros, which matches the dividend from the previous year and surpasses analysts’ forecast of 0.34 euros.
Looking ahead, Purmo expects the adjusted EBITDA for 2024 to be on par with or exceed that of 2023, which stood at 92.3 million euros.
The review suggests that inventory levels at retailers are now stable, and a lower interest rate environment supports the expectation of a gradual market recovery. The company has implemented strong margin management measures, which are set to continue in 2024, providing a level of financial certainty. Nevertheless, the potential impact of increased geopolitical risks and general uncertainty on Purmo Group’s core market have been noted.
The company’s development program has surpassed expectations, positively affecting Purmo Group’s outlook for 2024. The program’s cumulative target for adjusted EBITDA improvements has been revised to 50 million euros, up from the previous target of 40 million euros, with these improvements expected to be realized by the end of 2024.
Purmo Group’s Managing Director, John Peter Lees, commends the company’s performance in the last quarter of the year.
Lees acknowledges the company’s strong performance during a year marked by weak demand, primarily due to the destocking of customers and repair shops in the market and in key product groups. He states that the results were in line with the company’s guidelines that were published at the start of the year.
Lees highlights the diligent work of the entire Purmo Group team during 2023 on margin management measures, which evidently contributed to the strong improvement in the adjusted EBITDA margin of 12.4 percent, a 2.1 percent increase compared to the previous year.
He also notes the strengthening of the balance sheet at the close of 2023, with the ratio of net debt to adjusted EBITDA falling to 2.38 from 2.96 a year earlier.
“This provides us with the capacity to pursue acquisition opportunities,” Lees concludes.