Once a favourite among UK fund managers, Genuit (GEN) has fallen out of favour this year with a near-60% share price loss. The FTSE 250 company, formerly called Polypipe, is one of Europe’s biggest plastic piping manufacturers and is also involved in underfloor heating and ventilation.

The £630 million company has been investing in factory automation, it has scale, and it is a key player in environmental construction projects.

The share price decline can be attributed to a slowdown in growth and falling margins.

A warning that full year profit will be at the lower end of expectations as trading deteriorated in the last few weeks of the third quarter underlined these negative trends.

There are now calls from MPs and business leaders for the UK Government to cut projects like the HS2 rail expansion, where Genuit has exposure.

Its earnings forecasts have been downgraded since the summer amid a multitude of negative factors include a cyberattack and a shortage of boilers in the UK hurting its Adey business which helps to improve the efficiency of heating systems.

The company is holding an investor event (10 November) to give more detail on its business which may help the market to better understand its prospects. However market sentiment towards construction is currently weak leaving Genuit’s share price with headwinds to overcome.

It trades on 8.8 times 2023 forecast earnings, and it had a £167.9 million net debt position on 30 June 2022.

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