Epwin Group 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.
Epwin is exposed to both repair, maintain, improve (RMI, c 70% revenue) and new build (c 30%) in the UK housing market. Despite the expected weakness in new build, demand from the RMI market has remained more resilient, which implies a relatively robust end to 2023 with some optimistic signals beginning to emerge from new build for 2024.
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Chris Empson
FD
Jon Bednall
CEO
Forecast net debt (£m)
14.6
Forecast gearing ratio (%)
14
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 13.8 | 16.9 | 11.6 |
Relative | 12.4 | 9.3 | 9.6 |
52 week high/low | 87.0p/63.0p |
Epwin Group’s H223 trading was robust and management has navigated inflationary pressures well. As a result we have increased our FY23 and FY24 underlying operating profit estimates by 13.6% and 10.3%, respectively. Longer term, well-established growth trends imply that Epwin is well placed to leverage off increasing demand for its energy-efficient and low-maintenance building products. Management action contributed to overall margin expansion, a feature that we expect to continue in FY24. Epwin offers an attractive investment case with the potential for uplifts from additional self-funded M&A. It trades on a P/E ratio of 7.8x, c 30% below the long-term average of 10.7x, and yields c 6%.
Y/E Dec | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (fd) (p) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2021A | 329.6 | 36.3 | 13.7 | 9.06 | 9.5 | 3.5 |
2022A | 355.8 | 41.6 | 16.5 | 8.84 | 9.8 | 3.0 |
2023E | 349.7 | 42.0 | 18.3 | 9.89 | 8.7 | 3.0 |
2024E | 354.9 | 42.5 | 19.0 | 9.85 | 8.8 | 3.0 |