Tomorrow morning, this £135m capitalised building products group will announce its Interim Results to end-June.
We already know that times have been tough in its marketplace, however Epwin has put up a good show against its challenges.
The group is a leading manufacturer of energy efficient and low maintenance building products, with significant market shares, supplying the Repair, Maintenance and Improvement, new build and social housing sectors.
In its early August Trading Update the company stated that it remained confident of delivering underlying operating profit for the year in line with market consensus expectations, whilst continuing to grow its profitability and shareholder value, as well as making further strategic and operational progress.
The shortage of affordable homes in the UK and the new Government’s commitment to boost the sector will surely rub off favourably for the products supplier.
CEO Jon Bednall stated that:
"Trading in the first half was consistent with the Board's expectations with underlying profit in line with a strong 2023 comparative, in what continue to be challenging markets.
We remain confident of achieving our full year expectations, with a further year of profit progression, and have a positive view of our future prospects despite the short-term macroeconomic headwinds.
Looking further ahead, the medium and long-term drivers for the Group's products remain positive."
Analyst Andy Hanson at Zeus Capital believes that the group’s consistently strong performance, where management has a track record of meeting or beating market expectations, is undermined by the low rating of its shares.
For the full year to end-December he estimates that despite slightly lower revenues of £328.2m (£345.4m), the adjusted pre-tax profit will actually be over 10% higher at £19.8m (£18.0m), with earnings of 10.4p (9.7p) and a dividend of 5.1p (4.8p) per share.
For 2025 he sees £336.4m sales, £21.1m profits,11.1p earnings and 5.5p dividend per share.
In early March this year I again Profiled this group, with its shares then at 77.50p, stating that I was confident of my 94p Target Price being achieved.
At the current 96p, the estimates put the group’s shares out on 9.2 times earnings and on a 5.3% yield, both of which clearly identify them as under-rated, even more so as the group continues its big share-buyback programme.
Tomorrow’s Interims should be of interest.
(Profile 10.02.23 @ 75p set a Target Price of 94p*)
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