Year-end commentary included an in-line trading update for FY16. Epwin Group PLC (LON:EPWN) has progressed in a number of different areas in the year, not least the roll-out of a new window system. FY17 will also have its challenges but we believe there is resilience in the Epwin model and the current rating offers investors scope for good capital growth alongside strong income returns.
A year of progress
While market conditions have again been described as challenging, Epwin states that FY16 profitability will be in line with expectations. Our estimates show a good uplift over the prior year; we believe the majority of the y-o-y increase will have been generated by acquisitions (Stormking, Ecodeck and, to a lesser extent, National Plastics). These businesses have added new products and processes to the Epwin portfolio and broadened distribution reach. Within existing operations, we see the successful roll-out of the new Optima window system as significant. It consolidates customer ties, updates the company’s offer and, now the transition is complete, should strengthen market presence in FY17. Elsewhere, we expect roofline and rainwater activities (part of Extrusion & Moulding) to have had a reasonably good year, while Fabrication & Distribution’s performance will continue to reflect some operational challenges previously noted.
