I'm planning to cover a few stocks from yesterday, since there is a lack of news today (ignoring the macroeconomic issues, of course!)
Share price: 106.4p (+2%)
No. shares: 142.5m
Market cap: £152m
A strong set of results from this manufacturer of building products (windows, doors, decking, etc):
Final dividend is increased marginally to 4.4p.
Net debt also increases to £20.6 million.
Epwin has been pursuing growth by acquisition; all acquired companies are said to be performing well.
Outlook is a bit subdued:
"Whilst the long-term impact of the EU referendum result on consumer confidence remains unclear, trading in the current year has been in line with management's expectations. Input costs have increased sharply as a result of the weakening of sterling since June 2016. However, the Group is continuing its efforts to mitigate this and the Board remains confident in the long-term fundamentals of the Group and the markets it serves"
The overall vision seems to be continuously expanding/improving the product range and ending up with vastly more cross-selling opportunities and economies of scale as a result.
And the statement makes a few interesting arguments to the effect that people aren't repairing and maintaining their properties as much as they should, so that a backlog of necessary repair work is being built up. They would say that, wouldn't they!
Like-for-like revenues (excluding acquisitions) grew by just 2%.
Seems difficult to get too excited about this. On the one hand, it would be much too harsh to describe this as a commodity business - there is substantial expertise required in the manufacture of many of these products.
On the other hand, the company's admitted vulnerability to exchange rate movements, and the lack of like-for-like growth which is also due to factors beyond its control, leave me with some doubts about its underlying quality.
Regular readers will be aware that acquisition-led growth is something I instinctively shy away from.
Apparently I'm not the only one suffering from a bit of scepticism toward this share, as the PE ratio is undoubtedly very cheap versus the market as a whole, at less than 8x.
Stockopedia agrees that it's in the bargain bucket:
Share price: 150.75p…
Disclaimer:All my own views. I am not regulated by the FSA. No advice.