Epwin Share Discussion Threads

[sphere25] 16/4/2021 16:20

Taken a few here. It looks well bid and some decent buying coming in with a large iceberg (blocks of 9450) cleared at 100p. If that is the major seller here done, then it could push on. We often see pops through psychological marks as sellers congregate there. Price is trying to breakout and close above that key psychological 100p mark. Possible steady gap close to 115p if it can push on the back of the update. As per SFE post, the market is clearly looking forward to at least 2022 with the multiple falling to 10. EPWN hasn't commanded a massive multiple, but some decent demand and an interesting chart so I'm in for a trade. All imo DYOR

[davebowler] 15/4/2021 08:52

Zeus- RMI demand patterns remain strong leading to further increases to FY21 estimates Today’s FY20 results are better than the guidance provided in the pre-close trading update (Dec 16th, 2020). The strong trading alluded to in that statement continued through the year end into Q1 2021. The better than expected trading leads to an upgrade to estimates in FY21, pre tax increases c. 12%, and new forecasts are introduced for FY22 and FY23. The announcement that a final dividend will be paid for FY20 is welcome and signifies management’s intentions. ZC estimates factor in a resumption of the 50% pay-out ratio utilised prior to the impact of COVID-19. Despite the double-digit upgrade, forecasts assume an element of conservatism due to movement in raw material costs. The majority should prove short term but if inflation persists current estimates are discounting the current environment. On upgraded forecasts, the shares are trading on c. 16x FY21 earnings falling to 10.3x in FY22. § FY20 recovery picked up pace during H2: Back in September 2020 when ZC reintroduced FY20 estimates, H2 revenue was forecast to decline 5%. The actual performance was growth of 4% resulting in £241.0m for the year, a decline of c. 15% yoy. Adj. pre-tax profit of £5.0m was ahead of the £4.8m forecast, and materially better than the £2.6m number introduced in September. The change in consumer spending habits undoubtedly under pinned the strong performance. However, the speed of the recovery along with measures introduced to allow for safer working practices during the pandemic created cost headwinds. Without these the recovery in profitability would have been stronger. § Forecasts increase on the strength of demand: The strong demand seen in Q3 and Q4 last year has continued into Q1 of the current year with trading ahead of expectations. The c. 80% upgrade to profitability seen in December reflected operational gearing. Today’s increase is predicated on better trading with revenue increasing c. 9% to £282.0m (prev. £259.2m) and pre-tax profit up c. 12% to £11.0m. The only cloud on the horizon currently is raw material cost input pressures. Resin has been trading at all-time highs, materially above the prevailing price in FY19 and FY20, and the cost of things such as hardware has increased due to commodity and shipping costs increasing. These pressures are likely to abate during the year, without them today’s revenue increase would have resulted in an even larger impact to earnings. § Best in class execution during the pandemic: Epwin was early to formally reinstate guidance relative to peers in the building product sector, particularly with regards its intention to recommence dividend payments. This stemmed from the strong operational performance of the business during the first lockdown. It had low gearing going into lockdown, significant financing headroom and hasn’t needed a waiver on its covenants, let alone a rescue rights issue. § Valuation: On FY21 earnings, Epwin is trading on a recovery rating of c. 16.0x with the potential for further upgrades should the economic recovery continue in FY21. Recommencement of dividend payments also mean investors can look forward to a c. 3% yield in FY21 with the potential for it to grow as earnings continue to recover.

[dope007] 17/2/2021 11:00

Next statement could be a warning based on input prices if they don't get their prices up in the market

[dope007] 28/1/2021 09:42

Input prices are going through the roof

[davebowler] 28/1/2021 08:53

Zeus; Positive trading continuing into FY21 Following on from the upgrades put through in mid-December, Epwin has confirmed that the FY20 outcome is in line with the increased forecasts. Revenue of c.£240m is 15% down yoy but importantly H2 experienced a positive performance of c.3% yoy. This is in stark contrast to the 33% decline in H1. Net debt is also in line at c. £18.0m, less than 0.7x EBITDA. The strong trading in the final months of FY20 has continued into the early weeks of FY21. ZC leave forecasts unchanged but welcome the fact that trading has continued to be strong into the New Year, despite further lockdowns in November, December, and January. The announcement of new supply arrangements offsetting raw material shortages is reassuring and further underpins confidence in the outlook. The shares offer good value, trading on c. 9.0x normalised earnings, assuming no growth to profit achieved in FY19, and management has committed to recommencing the dividend at the time of the FY20 results in April. In line with upgraded forecasts: The strong performance during the final months of the year lead to significant upgrades of c. 5% in revenue and 30% in operating profit for FY20. The previous revenue estimate assumed 5% decline in H2. The actual outcome was a positive 3%. The stronger finish to FY20 fed through into FY21 estimates with revenue increasing c.8% to £259.2m and operating profit up 17% to £13.9m. This remains substantially below the normalised level of £21.2m achieved in FY19. Positive operational developments: The new Telford logistics and finishing facility was completed on time and budget in the year and was fully operational by the end of December. This will materially enhance operations moving forward. A small acquisition has also been announced this morning of a plastic distribution business. It has eight branches located in Cumbria and Southern Scotland. Total consideration is £3.8m and including synergies management estimate it has paid 4x EBITDA. Whilst small it is a positive step in expanding the distribution network. Highly professional performance during FY20: Guidance was withdrawn during the early part of the pandemic but was reintroduced quickly relative to peers. This included the commitment to recommence dividend payments at the time of the FY20 results. Communication has been clear with regards the financial position of the business, it had conservative gearing going into lockdown meaning Epwin did not need to raise additional funds or ask lenders for covenant waivers. Valuation: On FY21 earnings, Epwin is trading on a recovery rating of 16.0x with the potential for further upgrades should the economic recovery continue. Recommencement of dividend payments in FY20 also mean investors can look forward to it growing in line with earnings growth as we expect the 50% earnings pay-out ratio to be reintroduced from 2021.

[cordwainer] 05/1/2021 21:38

Keeping a watch here but recently picked up Brickability (BRCK) which seems a good value play with good growth potential.

[energeticbacker] 16/12/2020 16:00

If one likes the building materials sector this could be an interesting play, but Investor's Champion can think of more appealing opportunities, some of which can be found in their Portfolios and Bonkers Bargains features.

[18bt] 16/12/2020 07:25

Strong trading update and likely reinstatement of dividend. Lot's of evidence of the RMI sector being very strong including Travis Perkins this morning.

[dope007] 04/12/2020 09:01

Expensive up here

[dope007] 17/11/2020 14:11

Eurocell statement is being read across to Epwin

[farrugia] 17/11/2020 13:05

Finally moving. I have quite a bit of this. The home improvement trend should favour this kind of company.

[davebowler] 10/9/2020 09:25

Zeus; Strong trading post lockdown and reintroduction of forecasts Since the easing of lockdown restrictions, Epwin has seen stronger demand than had been expected. As a result, ZC reintroduces forecasts for FY20 and FY21 based on guidance provided by the Company. This includes a small dividend estimate of 1.0p for FY20 increasing to 2.2p in FY21, it is assumed the 50% pay-out ratio target is reintroduced. Despite seeing an almost 100% closure of the business, and therefore revenue, over an eight-week period, Epwin has not needed to raise additional equity or asked its lenders for covenant waivers. This is in stark contrast to many of its peers in the building product space and is testament to the strong financial management of the business. Our assumption that volumes will be 15% down in FY21, relative to FY19, looks conservative and puts the shares on a recovery rating of c. 17x with a dividend that will grow in line with earnings. § Strength of the business highlighted by management’s confidence to reinstate guidance: Epwin has dealt with the COVID-19 situation and the resulting lockdown professionally, managing the business in the best interests of shareholders. It had low gearing going into lockdown, significant financing headroom and hasn’t needed a waiver on its covenants, let alone a rescue rights issue. Since restrictions began to ease in late-May, consumer demand, both RMI and DIY, across the building product sector has been materially stronger than expected. For Epwin, this has meant +ve L4L revenue performance in both July and August. This improved visibility on trading aligned to the financial strength of the business is allowing the management team to reinstate guidance at an earlier stage than most peers in the sector. § ZC forecasts better than expected: Estimates are reinstated for the current year to December and FY21. In FY20, revenue is expected to be down 19% yoy at £228.3m (FY19: £282.1m) following a 33% decline in H1. We assume H2 is marginally down yoy, a conservative approach considering the positive performance in July and August. Operating profit of £6.8m for FY20 shows a recovery to c. £8.5m in H2, c. 65% of the level achieved in H219. A very good performance in the circumstances. Net debt will increase marginally at c. £20.0m falling from a peak of c. £30.0m in March. FY21 is predicated on conservative estimates, assuming volumes are in line with the average current forecasts from the CPA and Experian for private housing RMI to be down c. 15% in 2021 relative to 2019. This is conservative, not just in quantum of the fall in the market, but also no outperformance is assumed despite the new products Epwin has brought to market. § Valuation does not reflect recovery potential: On conservative FY21 earnings, Epwin is trading on a recovery rating of 17.0x and a pre IFRS 16 EV/EBITDA of 8.7x. In addition, estimates factor in a small but recovering dividend from FY20 with the shares yielding 2.9% in FY21. On normalised FY19 earnings Epwin trades on sub 8.0x.

[dope007] 25/8/2020 13:37

Profine expand capacity in the UK hxxps://www.profine-group.com/en/news-and-media/#!/press-releases/profine-strengthens-its-position-in-the-uk-market-with-an-acquisition

[dope007] 25/8/2020 09:12

AIM stock so don't expect anything unless a takeover comes in

[bennya] 25/8/2020 09:04

This has got to rerate soon, numbers look solid and performing well. Half year results on 10th Sept so hopefully will start to see this climb. GLA

[pj84] 10/8/2020 18:43

Just reposting link hTTps://www.directorstalk.net/epwin-group-deliver-a-better-than-expected-performance-analyst-interview/

[sphere25] 06/8/2020 08:27

Another decent update: New build slow but steadily increasing with RMI being strong enough to have sales ahead of expectations. Importantly, the recovery is continuing into July and August: "..with very strong demand for PVC profiles in June, continuing throughout July and into August." Confident on the financial front too: "The Board has not sought to increase these bank facilities further nor access other sources of funding, as it believes its available cash and facility headroom provides sufficient liquidity and flexibility to pursue its strategic objectives. The Group met its banking covenants as at 30 June 2020 and does not currently anticipate needing to seek any variation to these pre-Covid-19 measurements." The bad news looks more than baked in here. Have to wait and see if the market begins a re-rating soon.

[dope007] 08/7/2020 20:39

In this industry Cheshire Epwin are one of the strongest. Their problem is being on the AIM mkt!!

[cheshire] 08/7/2020 16:31

Another possible winner could be Safestyle (SFE)

[cheshire] 08/7/2020 16:28

I have bought EPWIN today, looks like the government support announced today will have a very positive effect IMHO.

[farrugia] 08/7/2020 10:10

this company could possibly benefit from the new government scheme? https://www.bbc.com/news/business-53313640 which others might benefit?