EPWN Epwin Group Plc

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

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/