Epwin Group Plc (LON:EPWN), the low maintenance building products manufacturer, supplying businesses in the Repair, Maintenance and Improvement (“RMI”), new build and social housing sectors, announced today its half year trading update and notice of its half year results announcement.
Revenues and operating profits in the first half year were in line with the Board’s expectations despite market conditions, particularly in the key RMI market, remaining challenging. As reported in the AGM Statement in May, materials price inflation has also had an increasingly significant impact upon costs in the period and this continues to be the case.
In response to the on-going market conditions, since the half year the Group has commenced a programme aimed at adjusting its capacity and cost base.
Additionally, since the AGM the Group has noted changing circumstances within its customer base affecting two of its customers, each accounting for around 5% of the Group’s revenue. One has significant funding issues and is undertaking a strategic review, whilst the other has sold its plastic distribution business which is principally supplied by Epwin, to a competitor of the Group. The implications, if any, of these matters remain unclear at this stage.
Aside from these two specific issues, the Board’s current view is that the outturn for the full year ending 31 December 2017 will be marginally below market expectations. The Group’s financial position remains strong with net debt at the half year less than one times 2016 EBITDA and with significant funding headroom to continue to invest in the business.
Jon Bednall, Epwin Group Plc Chief Executive, commented: “Whilst the current market conditions continue to be challenging, we remain confident of the long term growth drivers in the RMI market and continue to progress with our strategy, focused on operational improvement, selective acquisitions to broaden our product portfolio, cross‐selling across our brands and product development. We are confident in continuing our record of strong cash generation and our ability to offer an attractive dividend to shareholders.”
Notice of results
The Group will announce its half year results for the six months ended 30 June 2017 on Wednesday 13 September 2017.