Epwin Group

LN: EPWN

£121.3m market cap

84.9p last close

Epwin supplies functional low-maintenance exterior building products (including windows, doors, roofline and rainwater goods) into a number of UK market segments and is a modest exporter.

Investment summary

Epwin’s H119 update reiterated existing guidance. Revenue was marginally ahead y-o-y on a like-for-like basis which is likely to reflect some pricing improvement and, implicitly, volume softness, in our view. Given previous restructuring actions, progress from window systems (we expect, including weak competitor effects) and acquisitions, H119 EBIT should exceed its prior year equivalent. Markets remain soft but business improvement activities, including new facility and product development investment, are ongoing and should be reflected in earnings improvement. A site purchase, construction and lease agreement for a new warehouse and finishing facility at Telford has been signed, which will yield a one-off £8m cash benefit.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 292.8 32.1 22.4 13.4 6.3 6.7
2018A 281.1 27.0 16.5 9.8 8.7 4.7
2019E 291.3 28.2 17.6 10.1 8.4 5.2
2020E 296.2 29.5 18.7 10.7 7.9 4.5
Last updated on 13/09/2019
Industry outlook

Epwin is exposed to both RMI (c 70% revenue) and newbuild (c 30%) in the UK housing market. Newbuild activity is clearly still growing, while RMI demand has been more patchy. Referencing potential post Brexit consumer confidence, industry commentators have expressed near-term caution.

Last updated on 13/09/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 17.3
Forecast gearing ratio (%) 17
Price performance
%
1m
3m
12m
Actual 14.4 3.5 0.4
Relative* 11.8 2.8 (0.3)
52-week high/low 87.2p/68.0p
*% relative to local index
Key management
Jon Bednall CEO
Chris Empson FD

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