Still plagued by weak demand for its fabricated windows and doors, Epwin (EPWN) effectively bought in its growth during the first half of the year. Management blames uncertainty caused by the referendum (a familiar refrain), as well as a slowdown in the social housing market for the slight decline in sales for its fabrication and distribution business. Overall like-for-like sales were flat at £125m.
The building materials supplier benefited from its acquisition of pre-fabricated glass reinforced plastic building components supplier Stormking, and wood plastic composite supplier Ecodek at the end of last year. National Plastics, which distributes building plastic to trade customers, was also added to the fold during the first half. Management hopes this will add scale to its distribution network and double its prospective trade clients.
Like-for-like sales at the extrusion and moulding business grew by 5 per cent to £73.6m, while the acquisition of higher-margin businesses boosted operating margins by 250 basis points. Management has implemented a number of efficiency measures within its fabrication and distribution business to address its weaker performance. These include a new IT system that allows surplus stock to be distributed more efficiently on a nationwide basis.
Analysts at Zeus Capital expect adjusted pre-tax profits of £24.3m and EPS of 14.2p for the year to December 2016, up from £19.6m and 12p in 2015.
EPWIN (EPWN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 110.25p | MARKET VALUE: | £156m | |
| TOUCH: | 109.75-111.75p | 12-MONTH HIGH: | 155p | LOW: 94p |
| DIVIDEND YIELD: | 5.9% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 59p* | NET DEBT: | 36% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 124 | 7.6 | 4.6 | 2.12 |
| 2016 | 143 | 10.4 | 6.1 | 2.2 |
| % change | +15 | +37 | +32 | +4 |
Ex-div: 22 Sep Payment: 21 Oct *Includes intangible assets of £69m, or 48p a share | ||||
