Shares in Epwin (EPWN) fell 16 per cent to 79p after the building products manufacturer warned that full-year profits will be slightly below market expectations.
Trading in the first half of the year was largely in line with expectations despite tough conditions in the repair, maintenance and improvement sector. However, there are significant headwinds going into the second half, not least a sharp rise in the cost base as a result of higher raw material costs caused by sterling’s weakness.
The group has also experienced problems within its customer base, with two customers each accounting for around 5 per cent of group revenue causing difficulties. One is experiencing funding issues and is undertaking a strategic review, while the other has sold its plastics distribution division, which was principally supplied by Epwin, to a direct competitor of the group. Finances remain in good shape, with net debt at the half-year stage less than one times cash earnings. Half-year results for the six months to June are due for release on 13 September.
