 Epwin is the leading, UK-based manufacturer of energyefficient and low maintenance building products, holdingsignificant market share and strong sustainability credentialsin the Repair, Maintenance and Improvement ("RMI"), newbuild and social housing sectors. Founded over 50 years ago,the Business is comprised of two divisions: Extrusion andMoulding (E&M) and Fabrication and Distribution (F&D).E&M is one of the UK's largest manufacturers of extrudedwindow profile, cellular roofline, cladding, rainwater,drainage, decking systems and GRP building components.F&D includes the Group's national network of plasticdistribution outlets and window stores.Their products, such as PVC and aluminium windowsystems, decking systems, and GRP building components,contribute to building and maintaining sustainable cities andcommunities. For example, their PVC windows achieve someof the highest energy ratings on the market, resulting inimproved heat retention, lower energy usage, and annualcarbon savings for homeowners. Buildings and product usecontribute 20.2% of the UK's total greenhouse gasemissions, making it the second-largest contributing sectoraccording to 2023 government data. Enhancing the energyperformance of UK homes is a national priority and by 2030,landlords must ensure properties meet at least a band CEnergy Performance Certificate (EPC) rating. The latestgovernment data shows that 59% of homes in Englandcurrently fall below a D rating. Epwin's windows, withefficiency ratings from A to A++, play a crucial role in theUK's carbon transition.020 3195 3500 | enquiries@stellar-am.com | stellar-am.comAuthorised and regulated by The Financial Conduct Authority (474710). Registered in England & Wales under No. 06381679.Sustainability Spotlight November 2024Your capital is at risk and may not get back the full amount invested. Investments in smaller companies will normally involve greater risk or volatility than investments in larger, more established companies. Tax treatment depends on the individual circumstances of each Investor and may be subject to change. This document is dated November 2024 and is intended for retail investors and their advisers and has been issued by Stellar Asset Management Limited ('Stellar'). This document is for information purposes only anddoes not form part of a direct offer or invitation to purchase, subscribe for or dispose of securities and no reliance should be placed on it. You should only invest based on the relevant Product Literature available from Stellar and your attention is drawn to thecharges and risk factors contained therein. Stellar does not provide investment or tax advice or make recommendations regarding investments. Stellar of 20 Chapel Street, Liverpool, L3 9AG is authorised and regulated by the Financial Conduct Authority. All information in this document is sourced from Oxford Metrics and publicly available information unless otherwise stated.Important InformationJack joined Stellar in January 2023 to support StephenEnglish and Phil Kirwan with the management of the StellarAIM IHT Service. He has a background as a CharteredAccountant from Grant Thornton and previously helpedmanage equity derivative products at Bank of America.Jack holds the ACA and ACSI designations as well as the CFACertificate in ESG Investing. As a keen Evertonian, he findshimself on an unending search for improvement!Jack PedleyAssistant Fund ManagerEpwin (106p2) They are also committed to reducing their own carbonfootprint, having reported a reduction in their energyintensity ratio (carbon emissions per £m revenue) by 8% in2023 compared to 2022. This improvement was driven byactions such as using newer and more efficient vehicles,optimising routes, and improving vehicle loading. This focuson operational efficiency not only reduces emissions, butalso helps the company save on fuel costs and improveoverall logistics. Since 2020, this intensity ratio has comedown by 38% (see below) showing a strong and continuedfocus on improving their carbon emissions efficiencyEpwin also places a strong emphasis on responsiblesourcing, operational efficiency, and waste reduction. Theirrecycling program offers customers a collection service forPVC-U frames and factory off-cuts, which are then taken toregional recycling hubs. This program not only helps reducewaste, but also encourages customers to participate in theirsustainability efforts. They have several other programs inplace, focused on minimising the use of virgin materials andpromoting a circular economy. A total of 84% of 2023 grouprevenues were derived from products that can be recycled.These long-standing commitments to recycling anddecarbonisation position them strongly in the climate andwaste transition. |
Have taken profits here at 105. It's clear the buyback is a great help to share price performance but the shares are just looking up with events by sector standards |
Decent results with improved margins impacted by weak end markets like many others in the building materials sector. Buy back amounts to 3.5% of equity and so the increase in dividend remains very affordable and also weak holders mopped up.Solid hold at these levels baring a recession. |
cheers davebowler
it might hinder short term performance at times if they underpaly stuff - but i like sensible cautious steady eddie type updates too the market. I think this note nicely sums up the decent job the board have done here - even if that isnt being reflected in the sharepice much !.
note stockopedia ranks companies to give some indication as to how soundt hey are overall (on financials) and currently this compoany gets a 99 overall rating out of 100. Note stocky is pretty picky ref dishing out 100 scores as there is currently only 1 100 rated company on the screen i have just run . going back a year or two ranking was mostly in 80's. |
Zeus-
Continuing to perform Epwin’s AGM statement confirms it is continuing to trade in line with expectations despite the volatile operating environment. Competitors, as well as other building products peers, have warned recently that trading in the first months of 2024 has been below expectations, putting pressure on estimates. The fact Epwin has not warned is testament to how well the business has been managed. It came out of the pandemic in a strong commercial position providing flexibility to manage the business in the best interests of shareholders. This included the management team guiding consensus estimates towards sensible and achievable forecasts. Management have not over promised like many of its peers, and this has started to be reflected in its relative valuation of 8.7x FY24 earnings, 5.1x EV/EBITDA and 5.8% yield. However, on an absolute basis, the shares look good value considering the market leading position of the business, its track record of meeting or beating forecasts, ability to add accretive acquisitions, strong cash generation, conservative balance sheet, generous and well covered yield and gearing into an improving operating environment. FY24 to date as expected following a strong performance in FY23: Epwin outperformed peers during FY23 and maintained profit guidance despite the weak operating environment and reduction in surcharges as input costs, such a resin, reduced. It should be remembered that it was a year of two halves, with the first six months showing strong revenue on the back of new build completions and surcharges, while the final months of the year saw market demand and pricing reduce. The market trends experienced in H2 ’23 have continued into FY24 and, considering the strong H1’23, it is not a surprise that revenue year to date is down yoy. Despite this, the operational performance of the business continues to improve, helped by cost pressures reducing, underpinning profit expectations for the year. This was reflected in the 140bp improvement in operating profit in FY23. Forecasts are conservative reflecting the current operating environment: Zeus’ FY24 revenue estimate assumes no growth yoy, which we believe discounts the current market environment into forecasts. Whilst there is further scope for surcharges to fall, their impact will reduce as we move into H2 and the price decline is annualised. Even if revenue is weaker due to reducing surcharges, the reduction in cost pressure should feed through to a higher operating margin offsetting any weakness. The assumption behind current estimates is that revenue and operating margin are at similar levels to those achieved in FY23, assuming little change in market conditions from where we are currently. Despite this, profit before tax is expected to increase by double digits due to financial gearing as the cost of debt reduces on a lower absolute level of debt. Valuation: Epwin’s share price has performed relatively well since November, rallying from a low of c. 65p back towards c. 90p. Despite this, they remain good value trading on 8.7x FY24 earnings, 5.1x EV/EBITDA and 5.8% yield. This is for a business that has not missed forecasts over the last three years, has only met or beaten expectations, has a strong balance sheet underpinning a high yield and with forecasts that assume no operational growth in the current period with profit growth predicated on reduced finance costs. Management has operated in the best interests of shareholders over the last few years and will no doubt continue to do so. |
reassuring trading update and you'll note the share buyback is discretionary. |
CEO is on a cushy ride, taking his salary and bonus every year, doesn't have a massive stake in the company; not sure he CBA to stick his neck out. Semi private company |
Even at today’s modest prices it is disappointing management can’t see better investment opportunities than buying back EPWN shares. Don’t they see that it decreases liquidity and is an admission of failure? |
Shareholder returns: share buyback and dividend· Share buyback programme commenced to boost shareholder returns:o Initial programme expected to complete todayo Intention to continue programme subject to AGM approval· Dividend per share increased by 8%:o Proposed final dividend of 2.80 pence per share, resulting in a total dividend for 2023 of 4.80 pence per share (2022: 4.45 pence per share)o Increased dividend reflects the positive outlook for the Group and its strong financial position |
Solid results and 4.8p div for the year |
Thanks Tole, good find! You always come up trumps with the relevant information just when it's needed. |
We usually get a trading update during January/early February announcing the date for full year results in April, but they seem to be running late this year.
Epwin's management are usually quite bullish, but with so many companies under-performing of late, my fingers are crossed trading is still in line with expectations. |
Maybe this can push them back into 3 figures ?? |
Results look good here |
Best volume today than of many months - maybe sentiment turning positive here? About time tbh |
Decemt TU today.
Revenues increased to approximately GBP180 million, with the Group continuing to trade ahead of a strong 2022 comparative.
The Group retains a strong balance sheet with covenant net debt at 30 June 2023 remaining low at GBP16.1 million (31 December 2022: GBP17.9 million), |
Bod need to up their game |
Added a few k for a punt today - shld be TU tmrw |
All on paper thin volume like 5k one day 20k another. Just needs some good news |
Must be a seller still / or market has stock to shift - could buy at mid price all day 80% is stock in tight hands Hunch is this is bottom in - famous last words |
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