SCP announced price increases in a letter today to many of their customers across the nation. The distributor explained the cause of the price increases in a brief memo. The letter cited shortages and unprecedented demand due to COVID along with other unforeseen circumstances such as the recent freeze in Texas as the cause. SCP explained they saw little alternative but to raise prices which begin to take place May 3, 2021.
SCP Price Increase Notice
“We have just been notified by several manufacturers that due to energy and labor costs, they are being forced to pass along rare mid-season price increases which are significant. Given the shortage of material due to COVID and the Texas freeze damage, we are not allowed to buy out far enough to protect our customers from these increases. Therefore, for the following large vendors, we will be passing along these price increases effective May 3, 2021. This will apply to all existing quotes and/or orders not purchased prior to May 3.” – SCP Distributors, LLC
- Pentair – average price increase of 5%
- Fluidra/Jandy – average price increase of 4%
- Hayward – average price increase of 7%
- Hasa – average price increase of 15%
Pool Industry Sounds Off On Price Increases
Many in the pool industry already have begun feeling the effect of price increases this year. The news did not bode well for pool contractors on social media. The sentiment many seemed to be expressing was one of frustration and worry. With many service technicians already struggling to stay operational during the pandemic, the increased prices seem that they couldn’t come at a worse time for some.
Kelli Carrillo shared the announcement today in 14 PSI Pool Industry Lounge, one of the many Facebook groups pertaining to the pool industry. Kelli is the Sacramento City IPSSA Chapter President, owner of Legacy Pool & Spa and the co-founder of the PGP (Pool Girl Pro) Industry Training Group. When asked about how she felt about the impending SCP price increases, Carillo expressed strong feelings on the subject.
“I didn’t have a mini heart attack until I got to the HASA 15% average.”kelli carrillo – legacy pool & spa
“When I first saw the rates I didn’t have a mini heart attack until I got to the HASA 15% average. I expect the 5-7 % increase in the spring and fall from all manufacturers.” said Carrillo. “Even though I have said to people I expected more of an increase this season from HASA due to tab shortage, actually seeing it was jaw dropping” she continued.
Adapting to Price Increases
We asked her how she expected SCP’s price increases to impact her day to day operations. Carillo replied “When it comes to my business, prices will just have to increase. I will find myself using chemicals more conservatively, implementing my chemical limitations per contract more and having to prove why the extra cost is worth staying with me compared to my cheaper competitors.”
Sharp Price Increases Coming Industry Wide
Letters began going out from SCP to most of the pool industry this week and the news was not good. Consequently, the announcement detailed which manufacturers were increasing prices on pool equipment and other essential products. SCP’s announcement comes on the tail-end of alerts sent out by other large distributors who announced intentions to begin increasing prices at the start of the new year.
A recent acquisition of CMP by Fluidra is sure to see an increase in pricing on those products as well. With smaller distributors now being acquired, consumers have pointed out a widening gap in the number of available alternatives. Already many in the pool industry wonder if Florida Water Products is the next alternative distributor to be acquired.
Many wonder… what’s next?
The rising cost of goods is sure to impact pricing at nearly every level of the pool industry. Analysts expect price increases on everything from pool service to new pool construction and predict that nearly every facet of the industry can expect an uptick in pricing now. The uncanny domino effect of shortages, supply and demand, acquisitions, and unpredicted weather have created conditions for a perfect storm of sharply inclining prices industry wide.
Latham IPO begins trading on Nasdaq
Latham IPO began trading Thursday. Scott Rajeski and his team were able to raise $380 million dollars in the IPO debut of Latham on Nasdaq.
Latham Group Inc. had their initial public offering today. Shares soared 43% on the first day of trading. Latham was able to raise $380 million in their initial public offering priced at the bottom of a marketed range.
The stock was initially priced at $19 per share in its IPO on Thursday, but closed at $27.25 in New York trading on Friday, giving it a market cap of $3.3 billion. The shares were sold by Latham for $19 to $21 each.
During the coronavirus pandemic, Latham’s profit and sales increased as property owners focused on home improvements, such as pools. Latham focused on acquiring Narellan and a 28% stake in Premier Pools & Spas.
In an interview, Chief Executive Officer Scott Rajeski said that he believes Latham will outperform the market, which he expects to rise by 10% per year.
“We felt this was a really good time to get our story out there into the public markets and continue to drive with brand awareness of our company,” Rajeski said.
“We are so excited that we are on this journey as we embark on pushing our brand to the homeowner. We created this unique direct to homeowner model to educate them on why a Latham fiberglass pool is the best pool of choice.” said Scott Rajeski “It’s got great economics, it’s got a lower up front cost than traditional products, and we are single handededly driving this material conversion story of fiberglass pools vs other pool types. It’s got an 18% penetration today in North America today,” continued Rajeski
Last year, Latham earned $16 million in net income on revenue of $403 million in net sales, up from $7.5 million in net income on $318 million in sales the previous year. The IPO proceeds will be used to pay down debt and buy back shares, as well as for general corporate purposes, according to the group, which is headquartered in Latham, New York.
Barclays Plc, Bank of America Corp., Morgan Stanley, and Goldman Sachs Group Inc. led the sale. The stock is traded under the symbol SWIM on the Nasdaq Global Select Market.
Featured Photo Credit: Times Union
Fluidra Predicts 6% Growth in Coming Years
Fluidra expects to grow sales above 6% and increase dividend by 15% in the coming years.
Fluidra, the global leader in pool and wellness equipment, has confirmed the strong positive prospects for the company in the medium-term. It is expecting to accelerate annual sales growth to above 6% in the coming years, outgrowing the market, driven by market share gains and acquisitions. The company is also set to continue its margin improvement, guiding to expand its EBITDA margin above 50 bps per year.
- The company expects to reach the high end of its guidance range for 2021, with sales growth of 15% and cash EPS growth of 25%.
- Fluidra has committed to become a carbon neutral company in 2027 as one of its main goals within its ESG policy.
During Capital Markets Day Fluidra has reaffirmed its strong cash generation medium term guidance with cash EPS, a key proxy that excludes non-cash items and non-recurring expenses, over 15% per year. This will allow Fluidra to fund value generation initiatives, including both shareholder remuneration and inorganic growth. The company has confirmed a dividend pay-out policy of 50% of cash net profit in the coming years. In terms of M&A, the company still sees significant inorganic growth opportunities in a fragmented industry, which can be leveraged on an excellent track record.
A strong 2021
A strong start to 2021 helped by the global stay-at-home and flight-to-the-suburbs trends, confirms the strong fundamentals of the business and the resilience of the industry.
After CMP’s acquisition, Fluidra raised its 2021 guidance, with Sales growth expectations of 12-15% and cash EPS growth of 17-25%. The company has confirmed today that it expects to reach the high end of the guidance range. Furthermore, Fluidra has confirmed that it expects to reach all the objectives defined in the Strategic Plan 2018-2022 in 2021, one year ahead of the plan.
ESG at the heart of Fluidra’s activity
Fluidra has presented its new comprehensive Environmental, Social and Governance (ESG) “Responsibility Blueprint” plan for the period spanning 2020-2026. One element that stands out in it is the introduction of ESG performance based variable remuneration for Fluidra’s managers.
On the environmental front, Fluidra has made the stellar commitment to becoming carbon neutral in 2027 in terms of Scope 1, 2 and by 2050 for Scope 3. Additionally, the firm expects to have more than 80% of products sales classified as ESG friendly in 2035, currently more than 50% of them already meet this criterion.
In the Social category, Fluidra will focus on the well-being of its employees, with a strong commitment to aiming for “zero net wage gap” between men and women by 2024.
The Governance category is also an essential part of the company’s roadmap. Fluidra achieved an ESG rating of 69 out of 100 based on S&P’s analysis and the company is committed to reaching a score of 80 by 2030.
“We are a global industry leader with a unique footprint and value proposition in a structurally attractive industry. We have achieved all our 2022 goals ahead of plan and we will continue growing faster than our sector. Most importantly, ESG has been at the heart of Fluidra’s activity, and our Responsibility Blueprint commitments will reinforce our long-term positive impact” Eloi Planes, Fluidra’s Executive Chairman stated
Hayward Moving it’s Corporate Headquarters to North Carolina
Hayward Holdings reported this week that they will be relocating their corporate headquarters to North Carolina.
Hayward Holdings reported this week that they will be relocating their corporate headquarters to North Carolina. They will be starting the transition this summer and expect to complete the move by the end of next spring.
Hayward Holdings Inc. currently has about 90 employees in it’s Berkley Heights, New Jersey facility. It is now relocating its senior management team, human resources, sales leadership, finance, and other strategic functions to Charlotte, according to the company. A variety of corporate operating positions will also be relocated to an existing manufacturing facility in Clemmons, North Carolina, which currently employs 850 employees.
“This is an important strategic next step for Hayward to create greater synergies and crossfunctional collaboration to improve decision-making, cycle time and customer service.”KEVIN HOLLERAN – HAYWARD CEO
“It will also result in long-term cost savings that will be redeployed back into the business, put us closer to our largest production facility and create easier access to connect with our customers, distributors and channel partners.” continued Holleran.
Hayward looked at a number of potential relocation locations before deciding that North Carolina was the right choice for the company’s needs. The North Carolina Department of Commerce, the Economic Development Partnership of North Carolina, Forsyth County Government, Charlotte Regional Business Alliance, Greater Winston-Salem, Inc., Mecklenburg County, and Forsyth County all contributed to this strategic decision with valuable support and assistance.
All other Hayward locations in the United States or around the world will be unaffected by the corporate relocation from Berkeley Heights. Relocation will begin in the summer of 2021 and be finished in the spring of 2022.
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