TIDMEPWN
RNS Number : 2806V
Epwin Group PLC
06 August 2020
6 August 2020
Epwin Group Plc
Half Year Trading Update and Notice of Results
Epwin Group Plc (AIM: EPWN) ("Epwin" or the "Group"), the
leading manufacturer of low maintenance building products,
supplying the Repair, Maintenance and Improvement ("RMI"), new
build and social housing sectors announces a half year trading
update for the six months ended 30 June 2020 and notice of its half
year results.
Summary
-- All manufacturing and distribution sites have returned to
operation with additional Covid safe-working practices
implemented
-- Demand has been stronger than anticipated from customers serving the RMI market
-- Newbuild sector demand initially slower to return, but call-offs now increasing steadily
-- H1 sales of GBP93m are ahead of the Board's expectations,
although 34% lower than the comparative period last year due to
lockdown.
-- Strong balance sheet - funding headroom increased GBP10m to c. GBP55m since the AGM update
-- Expect to meet all Bank Covenants
-- Optimistic for trading prospects in H2
Trading performance
Up until the third week of March, trading was slightly ahead of
the Board's expectations when the Group suspended operations
following the Government's Covid-19 announcements. Operations
remained suspended from then, throughout April, only recommencing
during May after the implementation of enhanced health and safety
procedures in line with Government guidance.
During June demand recovered at a stronger rate than anticipated
from our customers serving the RMI market, which is Epwin's largest
end market. June window systems and cellular extrusions sales were
over 10% up on June 2019 and 12.2% up in the month of July. Export
market demand continued and was supplied from stock throughout the
H1.
Demand from the Newbuild and social housing sector, which makes
up around 25% of Group revenues, had been initially slower to
recover, but this has improved with orders increasing significantly
into the start of August.
With demand stronger and more sustained following lock-down than
anticipated, Group revenues in the first half year were ahead of
the Board's expectations at GBP93 million (H1 2019: GBP140
million), with very strong demand for PVC profiles in June,
continuing throughout July and into August.
Balance sheet and liquidity
The Group's balance sheet remains strong. Net debt at the half
year, on a pre-IFRS 16 basis, was GBP21.3 million (H1 2019: GBP29.2
million) with over GBP55 million of cash and facility headroom,
significantly up from cGBP45 million since the last update on 16
June 2020.
The Group's banking facilities, which were increased last year,
total GBP75 million. The Board has not sought to increase these
bank facilities further nor access other sources of funding, as it
believes its available cash and facility headroom provides
sufficient liquidity and flexibility to pursue its strategic
objectives.
The Group met its banking covenants as at 30 June 2020 and does
not currently anticipate needing to seek any variation to these
pre-Covid-19 measurements.
Outlook
Towards the end of the second quarter we made significant
progress with our programme of site consolidation and
rationalisation. The construction of the new Telford distribution
and finishing facility is now complete and expected to be fully
operational by the end of the year. This industry-leading facility
will help us achieve operational efficiencies going into 2021 and
support both the growth of our existing products as well as the
development of our planned new products.
As previously stated, the impact of COVID-19 will inevitably
have a material impact on trading for the current year and it is
still too soon to quantify this at this stage. The Group continues
to monitor levels of demand across its operations and is
implementing cost saving measures when and where appropriate.
Therefore, in line with other businesses in the sector, all market
guidance and forecasts remain withdrawn until the half year
announcement.
Notice of results
The Group intends to announce its half year results on 10
September 2020.
Jon Bednall, CEO of Epwin, commented:
"Since our last announcement in June we have seen sustained
demand at higher levels than anticipated from the key RMI market
and have continued to ramp up our activities to meet this. Market
demand in other sectors is now showing good signs of returning and
current trading remains better than the Board expected.
We are optimistic for trading prospects in the second half and
expect to make further strategic progress with our site
consolidation and rationalisation programme, whilst continuing to
manage the challenges that the pandemic presents. Looking further
ahead, the medium and long-term drivers for the RMI market remain
positive."
Contact information
Epwin Group Plc
Jon Bednall, Chief Executive
Chris Empson, Group Finance Director 0203 128 8572
Shore Capital (Nominated Adviser and
Joint Broker)
Corporate Advisory
Edward Mansfield / Daniel Bush / Hugo 0207 408 4090
Masefield
Corporate Broking
Fiona Conroy
Zeus Capital Limited (Joint Broker)
John Gould / Dominic King 0203 829 5000
MHP Communications
Reg Hoare / Charlie Barker / Florence
Mayo
Epwin@mhpc.com 0203 128 8572
About Epwin
Epwin is the leading manufacturer of 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/
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END
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