MERCOR POSTS SOLID SALES FOR H1 2024/2025
MERCOR POSTS SOLID SALES FOR H1 2024/2025 DESPITE MARKET CHALLENGES
The MERCOR Group, a leader in the European fire protection market, reported a net profit of PLN 11.5 million for the first half of the 2024/2025 financial year (from 1 April to 30 September 2024), with revenue amounting to PLN 250.3 million. EBIT for the period was PLN 16.0 million and EBITDA reached PLN 25.3 million. In the second quarter alone, the Group’s revenue amounted to PLN 125.3 million, with net profit at PLN 5.4 million.
After the reporting period, the Mercor Group signed a preliminary agreement to sell its natural smoke exhaust and fire ventilation business to the Kingspan Group. The investor would pay a total consideration of PLN 420 million for the shares in the Group’s subsidiaries being divested. However, up to PLN 60 million of this amount would be deferred, contingent upon achieving specified consolidated EBITDA thresholds generated by the demerged business (to be ultimately carried out by the divestment companies) in the 12 months ending 31 March 2026.
“The first half of the 2024/2025 financial year was impacted by lower order levels due to deteriorating market conditions, including a slowdown in building construction activity and delays in the release of EU funds. Despite these headwinds, we maintained strong revenue levels thanks to the Group’s diversification across both products and markets. When analysing the year-on-year change in our net profit, it is worth noting the significant impact of a tax refund, including interest, amounting to approximately PLN 10.5 million, received last year, which substantially boosted net profit for the second quarter of the 2023/2024 financial year,” said Krzysztof Krempeć, President of the Management Board of MERCOR S.A.
In the first half of 2024/2025, the Group’s domestic market revenue accounted for 53.7% of total revenue, reaching PLN 134.3 million. Sales in foreign markets amounted to PLN 116 million, representing 46.3% of total revenue.
In December 2024, the Management Board of Mercor S.A. revised its previous approach to consolidating OOO Mercor Proof and resolved to transition from full consolidation to using the equity method for the subsidiary. The first periodic report reflecting this change was the report for the first half of the 2024/2025 financial year, covering the period from 1 April to 30 September 2024, with the historical data restated accordingly. Further details on this change in the consolidation approach were disclosed in Current Report No. 66/2024, dated 30 December 2024.
MERCOR GROUP’S RESULTS FOR THE FIRST HALF OF THE 2024/2025 FINANCIAL YEAR
PLN ‘000 |
H1 2024/2025 |
H1 2023/2024 |
Change |
Q2 2024/2025 |
Q2 2023/2024 |
Change |
|
Revenue |
250,311 |
275,880 |
-9.3% |
125,333 |
136,486 |
-8.2% |
|
Foreign sales |
115,987 |
122,267 |
-5.1% |
55,372 |
57,624 |
-3.9% |
|
Domestic sales |
134,324 |
153,613 |
-12.6% |
69,961 |
78,862 |
-11.3% |
|
Gross profit |
63,449 |
67,510 |
-6.0% |
29,961 |
33,267 |
-9.9% |
|
Gross profit margin |
25.3% |
24.5% |
+0.8pp |
23.9% |
24.4% |
-0.5pp |
|
EBITDA |
25,314 |
36,737 |
-31.1% |
11,603 |
18,708 |
-38.0% |
|
EBITDA margin |
10.1% |
13.3% |
-3.2pp |
9.3% |
13.7% |
-4.4pp |
|
EBIT |
16,038 |
27,514 |
-41.7% |
6,932 |
14,339 |
-51.7% |
|
EBIT margin |
6.4% |
10.0% |
-3.6pp |
5.5% |
10.5% |
-5.0pp |
|
Net profit |
11,450 |
30,425* |
-62.4% |
5,374 |
18,532* |
-71.0% |
|
Net profit adjusted for one-off items* |
11,450 |
19,911 |
-42.5% |
5,374 |
8,018 |
-33.0% |
|
Net profit attributable to owners of the parent |
11,503 |
30,030 |
-61.7% |
5,434 |
18,296 |
-70.3% |
|
Net margin |
4.6% |
11.0% |
-6.4pp |
4.3% |
13.6% |
-9.3pp |
* The net profit included the effect of a tax refund with interest of approximately PLN 10.5 million, received in the second quarter of the 2023/2024 financial year.
Decision to divest part of the business to Kingspan Group
Subsequent to the reporting period, on 22 November 2024, the Mercor Group signed a preliminary agreement to sell its natural smoke exhaust and fire ventilation business to the Kingspan Group, a global leader in insulation technologies and comprehensive system solutions for energy-efficient, high-performance and low-carbon buildings.
The key conditions for completing the transaction include obtaining concentration clearance from the relevant antitrust authority, securing approval from the Company’s General Meeting to transfer the Company’s assets forming an organised part of the business, completing the demerger process, and obtaining approval from the Company’s financing banks for the transaction, including the release of security interests created in favour of those banks over assets to be transferred in the demerger process to the divestment companies.
“Our strategy is centred around three key groups: customers, employees, and shareholders. We believe that the preliminary agreement with the Kingspan Group represents a positive outcome for all three. The transaction also provides an opportunity to accelerate our growth by implementing an investment programme for the Group's remaining divisions and pursuing new market opportunities. For shareholders, we plan to recommend allocating a substantial portion of the transaction proceeds toward a dividend payout,” stressed Krzysztof Krempeć, President of the Management Board of MERCOR S.A.