Half-year trading update and notice of results
06/08/2024 07:00
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RNS Number : 2467Z Epwin Group PLC 06 August 2024
6 August 2024
Epwin Group Plc
("Epwin", the "Company" or the "Group")
Half-year trading update and notice of results
Underlying operating profit in line with a strong 2023 comparative; confident
of achieving full year expectations
Epwin Group Plc (AIM: EPWN), the leading manufacturer of energy efficient and
low maintenance building products, with significant market shares, supplying
the Repair, Maintenance and Improvement ("RMI"), new build and social housing
sectors, is pleased to announce its half-year trading update in respect of the
year ended 31 December 2024 ("FY 2024").
Trading update
Trading during the first half of 2024 continued in line with the Board's
expectations.
As reported at the AGM update in May, the Group has continued to responsibly
manage the balance between volume and margin, with underlying operating profit
for the half-year ended 30 June 2024 in line with a strong prior year
comparative and Board expectations. Operating margins are ahead of the prior
half year.
As expected, revenues were behind the strong prior year comparative, as a
result of lower PVC input prices reducing previously levied surcharges and
demand remaining subdued in new build and RMI markets, as widely reported
across the sector. Underlying turnover, excluding surcharges, was 8% lower
than H1 2023 but only 2% behind H2 2023.
The Group retains a strong balance sheet with covenant net debt as at 30 June
2024 remaining low at £19.5 million (31 December 2023: £14.4 million),
equivalent to 0.6x adjusted EBITDA, having paid the final dividend of £4.0m
and purchased £3.3m (net) of shares under the share buy-back programme in the
period. This provides the Group with over £55 million of headroom on its
facilities to support its strategic objectives, including value enhancing
acquisitions.
Shareholder returns
The Board continues to return capital to shareholders both by way of our
ongoing dividend policy and share buyback programme.
The initial buyback programme, which completed in April 2024, was extended by
a further 3 million ordinary shares. Since the extension, 2.7 million shares
have been re-purchased and cancelled at an aggregate cost of £2.4 million
before fees.
The Board will continue to monitor the progress of the buyback programme and,
whilst there is no guarantee that the extended programme will be completed in
full, it is currently envisaged that it will complete no later than 30
September 2024.
Outlook
The Group remains confident of delivering underlying operating profit for the
year in line with market consensus expectations (1), continuing to grow
profitability and shareholder value, as well as making further strategic and
operational progress.
The Group's broad product range, diverse customer base and operations,
longstanding supplier relationships and strong balance sheet continue to
provide a large measure of resilience against any short-term changes in market
conditions.
The medium to long-term drivers of Epwin's end markets remain positive, with
the UK still facing a shortage of new and affordable housing and a new
Government committing to increasing the number of homes built, an ageing and
underinvested housing stock and increasing concern about the quality of social
housing. Environmental concerns are also driving legislation and initiatives
that will require improvements to homes on a larger scale than simply that of
essential maintenance, with the need to decarbonise the UK housing stock and
improve the energy efficiency of homes growing in urgency given the UK's net
zero commitments.
Notice of results
The Group expects to announce its results for the half-year ended 30 June 2024
on 11 September 2024.
Jon Bednall, Chief Executive Officer, said:
"Trading in the first half was consistent with the Board's expectations with
underlying profit in line with a strong 2023 comparative, in what continue to
be challenging markets.
We remain confident of achieving our full year expectations, with a further
year of profit progression, and have a positive view of our future prospects
despite the short-term macroeconomic headwinds. Looking further ahead, the
medium and long-term drivers for the Group's products remain positive."
((1)) Based on Company compiled consensus, the Board believes the average
analyst forecast for 2024, underlying operating profit to be £25.8
million (within a range of underlying operating profit expectations of
£25.6m to £26.1m).
Ends.
Contact information
Epwin Group Plc 078 3462 3818
Jon Bednall, Chief Executive
Chris Empson, Group Finance Director
Shore Capital (Nominated Adviser and Joint Broker) 0207 408 4090
Corporate Advisory
Daniel Bush / Harry Davies-Ball
Corporate Broking
Fiona Conroy
Zeus Capital Limited (Joint Broker) 0203 829 5000
Dominic King / Nick Searle
MHP 078 3462 3818
Reg Hoare / Matthew Taylor / Finn Taylor epwin@mhpgroup.com
About Epwin
Epwin is the leading manufacturer of energy efficient and low maintenance
building products, with significant market shares, supplying the Repair,
Maintenance and Improvement ("RMI"), new build and social housing sectors.
The Company is incorporated, domiciled and operates principally in the United
Kingdom.
Information for investors can be accessed www.epwin.co.uk/investors/
(https://protect.checkpoint.com/v2/___http:/www.epwin.co.uk/investors/___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpmMWYwOTY1Mjg0Y2U1NWI2MThjMjUwNGFmMGI1NmI5MDo2OmIzMTc6MGJlM2I4NTA2ZjNiZGM5N2NkYTM2OGFkZWFiODdmM2I4ZmVlYWQzNTE2NjdlYWEyZTZlODQzMWZmMDcwZThjOTpwOlQ6Tg)
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