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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Epwin Group Plc | LSE:EPWN | London | Ordinary Share | GB00BNGY4Y86 | ORD 0.05P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.00 | 1.15% | 88.00 | 87.00 | 90.00 | 88.50 | 87.00 | 87.00 | 245,080 | 16:35:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gen Contractor-nonres Bldgs | 355.8M | 8.4M | 0.0580 | 15.26 | 128.26M |
From Apr 2019 to Apr 2024
TIDMEPWN
RNS Number : 7517J
Epwin Group PLC
14 September 2016
14 September 2016
This announcement contains inside information
Epwin Group Plc
Half year results for the six months to 30 June 2016
Continued strategic progress
Epwin Group Plc (AIM: EPWN) ("Epwin" or the "Group"), the vertically integrated manufacturer of low maintenance building products, supplying the Repair, Maintenance and Improvement ("RMI"), new build and social housing sectors, announces its half year results for the six months to 30 June 2016.
Financial highlights
GBPm 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 10.4 7.6 +36.8% Basic EPS 6.08p 4.59p +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
Jon Bednall, Chief Executive Officer, 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."
Enquiries:
Epwin Group Plc +44 (0) 203 128 8100
Jon Bednall, Chief Executive
Chris Empson, Group Finance Director
Zeus Capital Limited (Nomad and Broker)
Nick Cowles / Andrew Jones / Jamie Peel +44 (0) 161 831 1512 John Goold / Dominic King +44 (0) 203 829 5000 MHP Communications +44 (0) 203 128 8100
Jamie Ricketts / Rossina Garcia
(1) Underlying operating profit and margin is operating profit before amortisation of acquired intangible fixed assets, acquisition expenses and share-based payments.
(2) Operating cash conversion is pre-tax operating cash flow as a percentage of underlying operating profit.
Forthcoming dates:
Ex-dividend date 22 September 2016 Dividend record date 23 September 2016 Dividend payment date 21 October 2016
About Epwin
Epwin is a vertically integrated manufacturer of low maintenance building products, supplying the RMI, new build and social housing sectors.
The Company is incorporated, domiciled and operates principally in the United Kingdom.
www.epwin.co.uk
Group Business Review
Epwin delivered an increase in revenue and profit in the first half, with headline revenues and operating profit up 16% and 48% respectively.
On a like for like basis, revenue and underlying operating profit were marginally higher than the prior period, a resilient performance in challenging market conditions. Like for like revenues were flat at GBP124.9 million (2015: GBP124.1 million) and underlying operating profit was marginally ahead at GBP8.1 million (2015: GBP8.0 million).
We invested further in new products in the first half, notably through the launch of a new market leading window system, "Optima". We are pleased to report that the new system has been very well received by both our existing fabricator customer base and within the wider market and the roll out is progressing to plan.
We continue to make good progress with our strategy to broaden our product range, technical capability and channels to market. The integration of Stormking and Ecodek (both acquired in late 2015) is progressing well, with both businesses performing in line with expectations. Stormking is a market leader in pre-fabricated Glass Reinforced Plastic ("GRP") building components predominantly serving the new build market, and Ecodek is a leading manufacturer of Wood Plastic Composite which is a 90% recycled hardwood substitute for balconies and decking. In the period to 30 June 2016 we acquired Specialist Plastics Distribution Limited ("SPD") and its subsidiaries, a national distributor of building plastics to the trade that operates principally under the 'National Plastics' brand. This acquisition will add scale to our existing distribution operations and provide a further route to market for the Group's growing product portfolio. Together the acquisitions contributed GBP18.4 million of revenue and GBP3.7 million of underlying operating profit during the first six months.
Overall, market conditions in the first six months of the year were consistent with 2015. Whilst the impact of the EU referendum is unclear, we noted a dip in the market before and after the vote.
Results
Hot Features
Premium
6 months 6 months
ended ended
30 June 30 June
2016 2015
Key financials GBP'million GBP'million
=========================================== ============= =============
Revenue (excluding discontinued and
disposed businesses) 143.3 124.1
============================================== ============= =============
Underlying operating profit (*) 11.8 8.0
Amortisation of acquired intangible fixed
assets (0.5) -
Acquisition expenses (0.2) -
Share based payments (0.2) (0.2)
Operating profit 10.9 7.8
============================================== ============= =============
Underlying operating profit margin
(*) 8.2% 6.4%
Operating profit margin 7.6% 6.3%
============================================= ============= =============
(*) Underlying operating profit and margin is operating profit before amortisation of acquired intangible fixed assets, acquisition expenses and share-based payments.
Extrusion and Moulding continues to perform well, with like for like revenues increasing by 5% to GBP73.6 million and like for like underlying operating profit increasing 11% to GBP8.0 million.
Fabrication and Distribution continues to be an area of focus, with actions underway to improve performance. Further changes were made during the first half to strengthen the senior management team and improve operations. Revenues were behind the first half of 2015 with the continued fluctuating demand patterns that affected H2 2015 impacting on operational efficiency. Like for like revenues for the first half were down 5% to GBP51.3 million, with underlying operating profit lower at GBP1.0 million (2015 GBP1.6 million).
Cash flow
6 months 6 months
ended ended
30 June 30 June
2016 2015
GBP'million GBP'million
=========================================== ============= =============
Pre-tax operating cash flow 9.4 6.3
Tax paid (1.2) (1.4)
Acquisitions (8.7) -
Acquisition of intangible fixed assets (0.6) -
Capital expenditure (7.7) (4.2)
Net interest paid (0.5) (0.2)
Repayment of borrowings (5.0) -
Finance lease repayments (0.4) (0.3)
Dividends (6.0) (3.8)
Net decrease in cash and cash equivalents (20.7) (3.6)
Net debt 29.9 2.2
============================================= ============= =============
Pre-tax operating cash inflow improved to GBP9.4 million (2015: GBP6.3 million), mainly as a result of the contribution of the acquisitions made in the final quarter of 2015. Pre-tax operating cash conversion was broadly in line with the prior half year at 80%. At 30 June 2016 the Group had net debt of GBP29.9 million (31 December 2015 GBP14.4 million net debt, 30 June 2015 GBP2.2 million net debt) as a consequence of the initial net cash consideration of GBP8.7 million for the acquisition of National Plastics and the capital investment related to the development and launch of the Group's new window system, Optima.
Dividend
The Board is pleased to announce an interim dividend of 2.20 pence per ordinary share (2015: 2.12 pence) in line with market expectations. This will be paid on 21 October 2016 to shareholders on the register on 23 September 2016.
Outlook
As previously reported, the Group's strategy is focused on extending our product portfolio, technical capability and channels to market, both through investment in new products and acquisitions; operational improvement; cross-selling across our customer base; and leveraging the recognition and channels of our brands for the benefit of the Group. We remain confident of our ability to progress these areas even in challenging market conditions. The long-term drivers of the RMI market remain positive.
There continues to be significant underinvestment by property owners in the repair and maintenance of the UK's housing stock and 77% of the UK housing stock was built before 1980.
Within the fenestration industry, figures indicate that around 4.3 million window frames are replaced each year, representing a replacement rate of less than 2% per annum. The Group believes that a replacement rate significantly above this is required to address the ageing population of fenestration products and, due to the recent and continuing history of underinvestment in UK housing stock, there is significant pent up demand within the RMI space.
Similar dynamics are true for the cellular roofline business, which has demonstrated growth, and further opportunities are believed to exist to grow given that it is estimated that cellular roofline is only 50% penetrated into the residential property market, with the balance still being largely timber.
The outlook for the markets we have entered via recent acquisitions is positive. The Wood Plastic Composite decking market is relatively new in the UK and we believe will demonstrate good growth. The Glass Reinforced Plastic moulding market, whilst being more mature, has also grown impressively as new housebuilders in particular look to improve efficiency via off-site manufacture and offers further opportunities in the trade and social sectors over time.
Whilst the impact of the EU referendum is unclear and market conditions remain challenging, the board is confident in the long term fundamentals of the Group and the markets in which it operates.
Divisional Business Review
The Group operates in the market through a number of brands, reported through two segments:
-- Extrusion and Moulding
Manufactures and markets the following products:
-- Leading brands of PVC-UE extruded 'cellular' roofline and cladding profile systems for the replacement and installation of soffits, barge boards, cladding and window trims. Epwin is the market leader extruding c.30,000 tonnes per annum.
-- Complete extruded PVC-U window profile systems for fabricators of windows, doors, cavity closers and curtain walling. c.35,000 tonnes of profile are manufactured per annum, making Epwin one of the leading UK manufacturers.
-- Complementary range of PVC-U rainwater and drainage products. A relatively new development in the Group with considerable scope for volume and market share growth.
-- Moulded Glass Reinforced Plastic ("GRP") building components to the housebuilding industry in the UK. The product range includes porches, dormers, chimneys, bay window roofs, entrance canopies, copings and other bespoke components.
-- Wood Plastic Composite ("WPC") products, the current primary application being a hardwood substitute for balconies and outdoor decking.
-- The business operates from extrusion and moulding facilities in Telford, Tamworth, Macclesfield, Wrexham and Scunthorpe.
-- Fabrication and Distribution
Services the specialist requirements of social, new build and the trade market sectors with fabricated windows and doors from the Group's own profile systems and the distribution of these and the Group's other products. Added value services include bespoke design, scheduling, plot invoicing and installation.
-- Manufactures in excess of 300,000 frames per year and more than 30,000 GRP and Thermoplastic door sets and c.1.3 million glass sealed units.
-- Operates from five window and door fabrication sites and two glass sealed unit manufacturing sites in Paignton, Telford, Cardiff, Upton-upon-Severn, Northampton and Newton Abbot.
-- Operates a chain of building plastic trade distribution centres and a chain of Window Stores to service local demand for the Group's manufactured products from the trade sector.
-- Added further distribution centres for building plastic and fenestration products with the acquisition of National Plastics in June 2016.
Segmental Results
6 months ended 6 months ended
30 June 2016 30 June 2016
GBP'million GBP'million
======================================= =============== ===============
Revenue (excluding discontinued
and disposed business)
======================================= =============== ===============
Extrusion & Moulding 90.5 69.9
Fabrication & Distribution 52.8 54.2
Total 143.3 124.1
======================================= =============== ===============
Underlying segmental operating profit
Extrusion 11.6 7.2
Fabrication & Distribution 1.1 1.6
Underlying segmental operating profit
before corporate and other costs 12.7 8.8
Corporate and other costs (0.9) (0.8)
======================================= =============== ===============
Underlying operating profit (*) 11.8 8.0
Amortisation of acquired intangible
fixed assets (0.5) -
Acquisition expenses (0.2) -
Share based payments (0.2) (0.2)
======================================= =============== ===============
Operating profit 10.9 7.8
======================================= =============== ===============
(*) Underlying operating profit and margin is operating profit before amortisation of acquired intangible fixed assets, acquisition expenses and share-based payments.
Extrusion and Moulding
-- Revenue increased 29% to GBP90.5 million (2015: GBP69.9 million) and underlying operating profit increased 61% to GBP11.6 million (2015: GBP7.2 million) primarily as a result of acquisitions and increasing volumes.
-- Operating profit margins improved significantly by 250 basis points compared to the same period in 2015, reflecting the higher margin acquisitions made in the last quarter of 2015 and the operational efficiency benefits.
-- The Group launched its new, market leading window profile system at the end of Q1 2016, which has been well received by both our existing fabricator customer base and within the wider market and the roll out is progressing to plan.
-- The rainwater and drainage business continues to perform well and is 10% up on prior year as the investment made by the Group in this area is coming to fruition.
Fabrication and Distribution
-- Revenue of GBP52.8 million (2015: GBP54.2 million) reflecting the soft market conditions as well as operational and commercial challenges within the business.
-- Towards the end of the second quarter, demand for fabricated windows decreased, we believe due to the uncertainty generated by the UK referendum on membership of the EU and subsequent vote to leave. The social housing market also slowed in the first half against 2015 with social housing starts down around 20% year on year.
-- Operating profit of GBP1.1 million, compared to GBP1.6 million for the same period in 2015, is lower due to the continued impact of lower and fluctuating sales volumes for fabricated products and the consequent operational efficiencies that arise. Market demand continues to be erratic, the Fenestration Self-Assessment Scheme (FENSA) statistics for the 6 months to June show an overall fall in certified installations of 2% against H1 2015.
Action plans are in place to address these matters and are being further considered following the referendum decision on EU membership.
-- The door business, which was disrupted by the site consolidation in 2015, has shown improved performance in H1 2016.
-- The Distribution businesses performed in line with expectations, although these too experienced a weaker trading result in June. Subsequent demand has improved, however it remains too early to predict the full impact of the EU referendum result on future demand. The acquisition of National Plastics for initial net cash consideration of GBP8.7 million in June 2016 adds further distribution outlets to strengthen the Group's distribution channel and particularly as the Group seeks to develop the market for its growing portfolio of products.
Condensed Consolidated Income
Statement
for the six months ended 30
June 2016
6 month ended 6 months Year ended
30 June ended 31 December
2016 30 June 2015
2015
(unaudited) (unaudited) (audited)
Note GBP'million GBP'million GBP'million
===================================== ===== ============== ============ =============
Group revenue 2 143.3 124.1 256.0
===================================== ===== ============== ============ =============
Cost of sales (99.9) (88.3) (178.6)
===================================== ===== ============== ============ =============
Gross profit 43.4 35.8 77.4
Distribution expenses (13.4) (11.8) (24.3)
Administrative expenses (19.1) (16.2) (34.0)
Underlying operating profit 3 11.8 8.0 20.1
Amortisation of acquired intangible (0.5) - -
assets
Acquisition expenses (0.2) - (0.6)
Share based payments (0.2) (0.2) (0.4)
------------------------------------- ----- -------------- ------------ -------------
Operating profit 10.9 7.8 19.1
Net finance costs (0.5) (0.2) (0.5)
===================================== ===== ============== ============ =============
Profit before tax 10.4 7.6 18.6
Taxation 5 (1.8) (1.4) (3.3)
===================================== ===== ============== ============ =============
Profit for the period and
total comprehensive income 8.6 6.2 15.3
===================================== ===== ============== ============ =============
Basic earnings per share Pence pence Pence
Earnings per share 6 6.08 4.59 11.32
Diluted earnings per share
Earnings per share 6 6.02 4.56 11.23
Condensed Consolidated Balance
Sheet
as at 30 June 2016
30 June 30 June 31 December
2016 2015 2015
(unaudited) (unaudited) (audited)
Note GBP'million GBP'million GBP'million
================================ ===== ============ ============ ============
Assets
Non-current assets
Goodwill 63.9 24.5 54.3
Other intangible assets 4.7 0.2 3.6
Property, plant and equipment 38.0 27.6 33.1
Deferred tax asset 0.4 2.9 0.7
================================ ===== ============ ============ ============
107.0 55.2 91.7
================================ ===== ============ ============ ============
Current assets
Inventories 26.9 23.6 23.6
Trade and other receivables 49.4 43.6 41.5
Cash and cash equivalents 8 1.4 - 22.1
================================ ===== ============ ============ ============
77.7 67.2 87.2
================================ ===== ============ ============ ============
Total assets 184.7 122.4 178.9
================================ ===== ============ ============ ============
Liabilities
Current liabilities
Bank overdraft 8 - 1.3 -
Other interest bearing loans
and borrowings 8 10.7 0.4 15.6
Trade and other payables 57.2 48.5 50.0
Tax payable 3.3 2.0 2.6
Provisions 0.7 0.9 0.6
================================ ===== ============ ============ ============
71.9 53.1 68.8
Non-current liabilities
Other interest bearing loans
and borrowings 8 20.6 0.5 20.9
Contingent consideration 5.5 - 5.5
Provisions 3.8 3.4 3.6
================================ ===== ============ ============ ============
29.9 3.9 30.0
================================ ===== ============ ============ ============
Total liabilities 101.8 57.0 98.8
================================ ===== ============ ============ ============
Net assets 82.9 65.4 80.1
================================ ===== ============ ============ ============
Equity
Ordinary share capital 0.1 0.1 0.1
Share premium 12.5 12.5 12.5
Merger reserve 23.9 15.6 23.9
Retained earnings 46.4 37.2 43.6
================================ ===== ============ ============ ============
Total equity 82.9 65.4 80.1
================================ ===== ============ ============ ============
Condensed Consolidated Statement
of Changes in Equity
for the six months ended 30
June 2016
6 months 6 months
ended ended Year ended
30 June 30 June 31 December
2016 2015 2015
(unaudited) (unaudited) (audited)
GBP'million GBP'million GBP'million
================================== ============ ============ =============
Balance at the start of the
period 80.1 62.8 62.8
Profit for the period 8.6 6.2 15.3
Issue of shares - - 8.3
Share-based payments 0.2 0.2 0.4
Dividends 7 (6.0) (3.8) (6.7)
================================== ============ ============ =============
Balance at the end of the period 82.9 65.4 80.1
================================== ============ ============ =============
Consolidated Cash Flow Statement
for the six months ended 30 June 2016
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 2015
2016 2015
(unaudited) (unaudited) (audited)
Note GBP'million GBP'million GBP'million
============================================== ====== ============ ============ =============
Cash flows from operating activities
Profit for the period 8.6 6.2 15.3
Adjustments for:
Depreciation and amortisation 4.1 2.8 5.5
Net finance costs 0.5 0.2 0.5
Taxation 1.8 1.4 3.3
Share-based payments 0.2 0.2 0.4
============================================== ====== ============ ============ =============
15.2 10.8 25.0
(Increase) in inventories (1.1) (1.2) 0.1
(Increase)/decrease in trade and other
receivables (6.7) (6.0) 0.3
Increase/(decrease) in trade and other
payables 2.0 2.9 (1.1)
(Decrease) in provisions - (0.2) (0.5)
============================================== ====== ============ ============ =============
9.4 6.3 23.8
Tax paid (1.2) (1.4) (2.3)
============================================== ====== ============ ============ =============
Net cash from operating activities 8.2 4.9 21.5
Cash flows from investing activities
Acquisition of subsidiary, net of cash
acquired (8.7) - (20.9)
Acquisition of intangible fixed assets (0.6) - -
Acquisition of property, plant and equipment (7.7) (4.2) (9.0)
============================================== ====== ============ ============ =============
Net cash from investing activities (17.0) (4.2) (29.9)
Cash flows from financing activities
Net interest paid (0.5) (0.2) (0.5)
(Repayment) / drawdown of borrowings (5.0) - 35.0
Capital element of finance lease repayments (0.4) (0.3) 0.4
Dividends paid 7 (6.0) (3.8) (6.7)
============================================== ====== ============ ============ =============
Net cash from financing activities (11.9) (4.3) 28.2
Net (decrease)/increase in cash and
cash equivalents (20.7) (3.6) 19.8
============================================== ====== ============ ============ =============
Cash and cash equivalents at the beginning
of period 22.1 2.3 2.3
============================================== ====== ============ ============ =============
Cash and cash equivalents at end of
period 1.4 (1.3) 22.1
Bank Borrowings (29.7) - (34.7)
Finance lease liabilities (1.6) (0.9) (1.8)
============================================== ====== ============ ============ =============
Net debt 8 (29.9) (2.2) (14.4)
============================================== ====== ============ ============ =============
Notes to the Condensed Consolidated Financial Statements
for the six months ended 30 June 2016
1. Basis of preparation
These financial statements have been prepared on the basis of the accounting policies expected to be adopted for the year ended 31 December 2016. These are in accordance with the Group's accounting policies as set out in the Group's consolidated financial statements for the year ended 31 December 2015.
The recognition and measurement requirements of all International Financial Reporting Standards ('IFRSs'), International Accounting Standards ('IAS') and interpretations currently endorsed by the International Accounting Standards Board ('IASB') and its committees as adopted by the EU and as required to be adopted by AIM listed companies have been applied. AIM-listed companies are not required to comply with IAS 34 'Interim Financial Reporting' and accordingly the Company has taken advantage of this exemption.
On the basis of current financial projections and facilities available, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and, accordingly, consider that it is appropriate to adopt the going concern basis in preparing these Interim Financial Statements.
The financial information in these financial statements does not constitute statutory accounts for the six months ended 30 June 2016 and should be read in conjunction with the Group's consolidated financial statements for the year ended 31 December 2015 which were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain statements under sections 498(2) and (3) Companies Act 2006.
The condensed consolidated financial statements for the six months to 30 June 2016 have not been audited or reviewed by auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.
The condensed consolidated financial statements were approved by the Board of Directors on 13 September 2016.
2. Segmental reporting
Segmental information is presented in respect of the Group's reportable operating segments in line with IFRS 8 'Operating Segments', which requires segmental information to be disclosed on the same basis as it is viewed internally by the Chief Operating Decision Maker.
Reportable segments Operations
Extrusion and Moulding Extrusion and marketing of PVC-U window profile systems, PVC-UE cellular roofline and cladding, rigid rainwater and drainage products and Wood Plastic Composite ("WPC") decking products. Moulding of Glass Reinforced Plastic ("GRP") building components.
Fabrication and Distribution Fabrication and marketing of windows and doors, distribution of cellular roofline, cladding, rainwater and drainage products, and manufacture of glass sealed units.
6 months 6 months
ended ended Year ended
30 June 30 June 31 December
2016 2015 2015
(unaudited) (unaudited) (audited)
GBP'million GBP'million GBP'million
Revenue from external customers
------------------------------------- ------------ ------------ -------------
Extrusion & Moulding 90.5 69.9 146.6
Fabrication & Distribution 52.8 54.2 109.4
-------------------------------------- ------------ ------------ -------------
Total 143.3 124.1 256.0
====================================== ============ ============ =============
Segmental operating profit
------------------------------------- ------------ ------------ -------------
Extrusion & Moulding 11.6 7.2 17.7
Fabrication & Distribution 1.1 1.6 4.2
-------------------------------------- ------------ ------------ -------------
Segmental operating profit before
corporate and other costs 12.7 8.8 21.9
Corporate and other costs (0.9) (0.8) (1.8)
====================================== ============ ============ =============
Underlying operating profit 11.8 8.0 20.1
Amortisation of acquired intangible (0.5) - -
fixed assets
Acquisition expenses (0.2) - (0.6)
Share based payments (0.2) (0.2) (0.4)
====================================== ============ ============ =============
Group operating profit 10.9 7.8 19.1
Net finance costs (0.5) (0.2) (0.5)
====================================== ============ ============ =============
Profit before tax 10.4 7.6 18.6
====================================== ============ ============ =============
3. Underlying operating profit
'Underlying operating profit' is the key profit measure used by the Board to assess the underlying financial performance of the operating divisions and the Group as a whole. 'Underlying operating profit' is operating profit stated before amortisation or impairment of acquired intangible assets, business reorganisation costs, acquisition expenses and share based payments.
4. Acquisitions
Provisional
fair values
on acquisition
Recognised amounts of identifiable assets
acquired and liabilities: assumed: GBPm
Acquired intangibles - brand 1.0
Property, plant and equipment 0.8
Inventories 2.2
Trade and other receivables 1.2
Cash and cash equivalent -
Other interest bearing loans and borrowings (0.2)
Trade and other payables (3.9)
Income tax payable (0.1) Dilapidations provision (0.3) Deferred tax liability (0.3) =============================================== ================ Fair value of assets acquired 0.4 Goodwill 9.6 =============================================== ================ Total Consideration 10.0 =============================================== ================
On 10 June 2016 the Group completed the acquisition of the entire share capital of Specialist Plastics Distribution Limited and subsidiaries (trading as "National Plastics") for net cash consideration in the period of GBP8.7 million and a total consideration of GBP10.0 million cash payable in the current year.
National Plastics operates a chain of plastics distribution outlets across the UK.
On acquisition an intangible fixed asset representing the National Plastics brand of GBP1.0 million was recognised. The goodwill of GBP9.6 million recognised on the acquisition of National Plastics represents the collective local knowledge of the workforce, plus the potential for cross-selling and synergies that exist as a result of the larger scale of the Epwin Group.
5. Taxation
The tax charge for the six months to 30 June 2016 is based on the estimated tax rate for continuing operations for the full year.
The main rate of corporation tax was lowered from 21% to 20% with effect from 1 April 2015. Further reductions to 19% from 1 April 2017 and to 18% from 1 April 2020 were enacted during 2016. In the March 2016 Budget, it was announced that the reduction from 1 April 2020 will be to 17% (instead of 18%) and it is anticipated that this will be enacted during 2016. This will reduce the Company's future current tax charge accordingly. The deferred tax assets at 30 June 2016 have been calculated based on the rate of 19% substantively enacted at the balance sheet date.
6. Earnings per share (EPS)
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2016 June 2015 2015
GBP'million GBP'million GBP'million
================================== ============ ============ =============
Profit for the period, being
basic earnings attributable
to ordinary equity shareholders 8.6 6.2 15.3
================================== ============ ============ =============
pence pence pence
========================== ====== ====== ======
Basic EPS
Basic earnings per share 6.08 4.59 11.32
========================== ====== ====== ======
Pence pence pence
============================ ====== ====== ======
Diluted EPS
Diluted earnings per share 6.02 4.56 11.23
============================ ====== ====== ======
Number of shares No. No. No.
Weighted average number of
shares used to calculate earnings
per share
* Basic 141,515,621 135,000,000 135,198,199
* Diluted 142,815,705 135,945,811 136,259,577
===================================== ============ ============ ============
7. Dividends
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2016 June 2015 2015
GBP'million GBP'million GBP'million
===================================== ============ ============ =============
2014 final dividend of 2.83 pence
per share - 3.8 3.8
2015 interim dividend of 2.12 pence
per share - - 2.9
2015 final dividend of 4.25 pence 6.0 - -
per share
===================================== ============ ============ =============
6.0 3.8 6.7
===================================== ============ ============ =============
The Group will pay an interim dividend of 2.20 pence per Ordinary Share in respect of the six months to 30 June 2016 (30 June 2015: 2.12 pence) on 21 October 2016 to shareholders on the register on 23 September 2016.
8. Net debt
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2016 June 2015 2015
(unaudited) (unaudited) (audited)
GBP'million GBP'million GBP'million
=========================== ============ ============ =============
Cash and cash equivalents 1.4 (1.3) 22.1
Bank Borrowings (29.7) - (34.7)
Finance lease liabilities (1.6) (0.9) (1.8)
============================ ============ ============ =============
Net debt (29.9) (2.2) (14.4)
============================ ============ ============ =============
The facilities available to the Group at 30 June 2016 were a GBP20.0 million term loan, GBP35.0 million Revolving Credit Facility and GBP5.0 million overdraft, secured on the assets of the Group. The term of the loan and revolving credit facility is for four years ending December 2019.
9. Cautionary statement
This document contains certain forward-looking statements with respect of the financial condition, results, operations and businesses of Epwin Group Plc. Whilst these statements are made in good faith based on information available at the time of approval, these statements and forecasts inherently involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause the actual result or developments to differ materially from those expressed or implied by these forward looking statements and forecasts. Nothing in this document should be construed as a profit forecast.
10. Copies of this half year report
Further copies of this half year report are available from the registered office: Epwin Group Plc, 1b Stratford Court, Cranmore Boulevard, Solihull, B90 4QT or on the Company's website www.epwin.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UORWRNRAKAAR
(END) Dow Jones Newswires
September 14, 2016 02:00 ET (06:00 GMT)
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