Zeus Capital Analyst Andy Hanson said this morning ” The current valuation of just 7.5x PER on current year earnings falling to 7.0x in FY17 does not reflect profit growth or Epwin’s track record of meeting growth in forecasts in a trading environment that has been difficult. In addition, the shares offer a prospective yield of 6% that is over twice covered. Management has indicated its intentions to grow the dividend by increasing the interim pay-out by 3.8% in line with expectations for FY16.”
Jon Bednall, Chief Executive Officer Epwin Group PLC LON:EPWN, said: “We made good progress in the first half of 2016, both with our performance and our strategy. This is reflected in the increase in revenues and profits in the first half, at improved margins.
“We have continued to broaden our product portfolio and channels to market, and drive operational efficiency. We completed one acquisition in the first half, following two acquisitions in 2015; they are integrating well. Whilst the impact of the EU referendum is unclear, the board is confident in the long term fundamentals of the Group and the market and expects to make further progress in the remainder of 2016.”
Epwin Group Plc (AIM: EPWN) the vertically integrated manufacturer of low maintenance building products, supplying the Repair, Maintenance and Improvement (“RMI”), new build and social housing sectors, has given DirectorsTalk its half year results for the six months to 30 June 2016.
Financial highlights
|
£m |
H1 2016 |
H1 2015 |
Change |
|
|
Revenue |
143.3 |
124.1 |
+15.5% |
|
|
Underlying operating profit 1 |
11.8 |
8.0 |
+47.5% |
|
|
Underlying operating profit margin 1 |
8.2% |
6.4% |
+180bps |
|
|
Profit before tax Basic EPS |
10.4 6.08p |
7.6 4.59p |
+36.8% +32.5% |
|
|
Dividend per share |
2.20p |
2.12p |
+3.8% |
|
|
Net cash / (debt) |
(29.9) |
(2.2) |
|
|
|
Operating cash conversion 2 |
79.7% |
78.8% |
|
|
Financial headlines
· Revenues up 16% and underlying operating profit up 48%
· Good contribution to half year performance from businesses acquired in 2015
· Continued margin improvement: operating margins up 180bps
· Resilient underlying performance in challenging conditions
· Strong cash performance and balance sheet supports investment in products and acquisitions
· 3.8% increase in interim dividend
Continued progress with strategy
· Investment in new products to drive long term market share gain
· Acquisition of National Plastics, broadening our plastics distribution channel and national reach for our growing product portfolio
· Stormking and Ecodek acquisitions integrating well and performing in line with our expectations
· Continuing strong performance in Extrusion and Moulding, like for like revenues up 5%
· Actions underway to improve Fabrication and Distribution performance
