Compared to most UK-quoted building materials plays, Tyman Plc (LON:TYMN) offers better exposure to growth in international markets especially North America. The acquisition of Giesse last year has coincided with a recovering European market also and, together with other acquisitions, is bringing increased commercial opportunities to the enlarged group. Success in converting them will surely attract a premium rating for the company.
Developing commercial opportunities overseas
Over 80% of Tyman’s EBIT is generated from outside the UK from increasingly strong market positions in its AmesburyTruth and Schlegel International divisions. Both have taken actions to consolidate and improve their operational footprint and these programmes are well advanced. Acquisitions are opening up adjacent segments at divisional and group level and the commercial opportunities arising from this are being developed. Schlegel’s acquisition of Giesse in 2016 illustrates this point well and we further explore the implications in this note. In the context of GDP growth resuming in Europe (the division’s largest country bloc) the extent to which progress is made here will determine whether the enlarged division can achieve a stated target of a mid-teens EBIT margin, versus our estimate of c 10%.
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