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Highlights

  • Epwin Group’s revenue declined 2.9% in FY23 due to reduced demand and lower PVC prices
  • Operating profit surged 18.6% thanks to effective pricing and cost control
  • The company continues its buyback program, with 2.7 million shares repurchased so far

Epwin Group PLC (LSE: EPWN) produces energy-efficient and low-maintenance building materials.

In FY23, the company’s revenue declined by approximately 2.9%, primarily due to reduced demand in key markets during the second half of the year, especially within private housing RMI and new builds. This drop in revenue was largely attributed to lower volumes and decreased surcharge impacts from falling PVC prices, although the £12.0 million contribution from acquisitions made in 2022 helped partially offset the overall decline.

Despite the revenue decrease, the company’s underlying operating profit surged by about 18.6%. This growth was driven by effective pricing strategies, rigorous cost control, and margin recovery. The positive impact of these factors outweighed the effects of eased raw material inflation and ongoing overhead pressures.

Recent Business Update

As per the company's half-year trading update, revenues for the first half of 2024 were lower than the strong performance in the prior year. This decline was primarily due to decreased PVC input prices and weaker demand in the new build and RMI markets. Underlying turnover was 8% lower compared to the previous corresponding period.

The company concluded a buyback program in April 2024. However, it was extended by an additional 3 million ordinary shares. Since the extension, 2.7 million shares have been repurchased and cancelled for £2.4 million, excluding fees. The Board will continue to monitor the buyback program, which is expected to conclude by September 30, 2024.

The Group plans to release its results for the half-year ended June 30, 2024, on September 11, 2024.

Company Outlook

As 2024 unfolds, Epwin Group PLC encounters macroeconomic challenges, including economic uncertainty and a slowdown in the housing market. Despite these issues, the company's diverse product portfolio, strong supplier relationships, and solid balance sheet provide resilience.

Long-term market drivers, such as housing shortages and environmental regulations, continue to be favourable, bolstering confidence in the company's strategy, according to the company's statement.

Top 10 Shareholders

The top 10 shareholders of Epwin Group together own approximately 75.41% of the total shares. Ruffer LLP holds the largest stake with around 16.98%, followed by Kennedy (Brian George) with about 14.44%, as shown in the chart below:

Stock Information

Over the past month, EPWN's stock price has risen by approximately 6.66%, and it has gained around 23.87% over the last six months. The stock has a 52-week low of GBX 63.00 and a 52-week high of GBX 98.00. It is currently trading above the average of these 52-week high and low values.

 

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 06 September 2024. The reference data in this report has been partly sourced from EODHD/Others.