We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 86.50 | 85.00 | 88.00 | 86.50 | 86.50 | 86.50 | 245,144 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gen Contractor-nonres Bldgs | 355.8M | 8.4M | 0.0578 | 14.97 | 125.69M |
From Apr 2019 to Apr 2024
TIDMEPWN
RNS Number : 4970K
Epwin Group PLC
11 April 2018
11 April 2018
The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.
Epwin Group Plc
Final results for the year ended 31 December 2017
Resilient performance despite subdued markets
Epwin Group Plc (AIM: EPWN) ("Epwin" or the "Group"), a leading manufacturer of low maintenance building products, supplying the Repair, Maintenance and Improvement ("RMI"), new build and social housing sectors, announces its final results for the year ended 31 December 2017.
Financial highlights
GBPm 2017 2016 Change -------------------------------------- ------- ------- --------- Revenue 298.3 293.2 +1.7% Underlying operating profit (1) 22.3 25.6 -12.9% Underlying operating profit margin (1) 7.5% 8.7% -120bps Adjusted profit before tax (2) 21.1 24.6 -14.2% Profit before tax 12.0 23.0 -47.8% Adjusted EPS (3) 13.47p 14.98p -10.1% Basic EPS 7.08p 13.85p -48.9% Dividend per share 6.69p 6.60p +1.4% Net debt (25.1) (20.6) Underlying operating cash conversion (4) 89% 120% -------------------------------------- ------- ------- ---------
(1) Underlying operating profit and margin is operating profit before amortisation of acquired other intangible assets, share-based payments and other non-underlying items.
(2) Adjusted profit before tax is profit before tax before amortisation of acquired other intangible assets, share-based payments and other non-underlying items.
(3) Adjusted EPS is calculated based on profit after tax adding back amortisation of acquired other intangible assets, share-based payments and other non-underlying items. Details of these items are in note 4 to the accounts.
(4) Underlying operating cash conversion is pre-tax operating cash flow as a percentage of underlying operating profit.
Financial headlines
-- Resilient performance; underlying operating profit of GBP22.3 million despite subdued market, significant input cost inflation and the previously reported challenges with two largest customers
-- In response to the subdued market, the Group is implementing a programme to consolidate its operating footprint which, along with the Entu customer insolvency has resulted in a net other non-underlying charge of GBP7.4 million (GBP3.5 million cash cost in the year)
-- Revenue up 1.7% at GBP298.3 million driven by strong sales of new products and full year effect of the 2016 National Plastics acquisition
-- Continued strong cash generation, despite the customer issues, with underlying operating cash conversion at 89%
-- Robust balance sheet to support ongoing investment in products, acquisitions and organic growth, leverage ratio at year-end 0.8 times
-- Proposed final dividend 4.46 pence per ordinary share, totalling 6.69 pence for the year (1.4% increase)
Delivering on our strategy
-- Programme of operational improvement continues alongside site consolidations:
o consolidation of our glass production facilities onto one site during 2017 completed
o phased consolidation of two further production units onto one site is progressing well
o further site consolidation and rationalisation planned for 2018
o investment in new warehousing facility in Scunthorpe, further developing the Group's logistics capabilities and customer offer
o plans developed for a new warehousing facility in Telford to consolidate existing Window Systems facilities and reduce operating costs
-- 2016 acquisition of National Plastics is integrating and performing in line with expectations -- Strong sales, and new customer wins from Profile 22 Optima window system launched in 2016
-- Development of new products is also progressing well with a number of launches planned in the next twelve months
Current trading
-- Trading in the current year has largely been in line with the Group's expectations. As has been widely reported, the key Repair and Maintenance market remains challenging, albeit the Improvement market seems less subdued. Although a smaller element of the Group's revenue, the new build market remains positive. The precise impact to the Group of the disposal by SIG of its plastic distribution business to a competitor of the Group is becoming clear.
-- Despite this backdrop; the Group expects to make further progress with its strategy focussed on operational improvement, broadening the product portfolio, selective acquisitions, cross-selling and market share growth in key sectors, building a platform for future growth. The Group continues to have a positive view of its prospects over the medium-term.
Dividend policy
-- Since the 2014 IPO, the Group will have paid GBP33.6 million of dividends, including the proposed 2017 final dividend. The Board has decided it is appropriate to review its dividend policy for future years. Therefore, in order to balance an attractive return to shareholders with providing flexible and efficient funding for the Group's growth and development plans, the policy will be to offer a progressive dividend that is approximately twice covered by adjusted after tax profits.
Jon Bednall, Chief Executive Officer, said:
"Epwin delivered a resilient performance in 2017, despite the reported customer challenges and significant increases in input costs. In the second half of the year we progressed with our strategy of broadening our product portfolio and channels to market, as well as continuing our programme of operational efficiency improvements. In addition, we have embarked on a programme of site consolidation and development designed to reduce costs and adapt the Group to the on-going market conditions. We remain confident in the long-term drivers in the RMI market and have a positive view of the Group's prospects in the medium-term and ability to continue to offer our shareholders an attractive return."
Enquiries:
Epwin Group Plc 0203 128 8100
Jon Bednall, Chief Executive
Chris Empson, Group Finance Director
Hot Features
Premium
Zeus Capital Limited (Nomad and Joint Broker)
0161 831
Nick Cowles / Jamie Peel 1512
0203 829
John Goold / Dominic King 5000
0207 886
Panmure Gordon (UK) Limited (Joint Broker) 2500
Erik Anderson / Andrew Potts
MHP Communications 0203 128
Reg Hoare / Charlie Barker / Florence Mayo 8100
Forthcoming dates:
Ex-dividend date 10 May 2018 Dividend record date 11 May 2018 Dividend payment date 4 June 2018
About Epwin
Epwin is a leading manufacturer of low maintenance building products, supplying the Repair, Maintenance and Improvement ("RMI"), new build and social housing sectors.
The Company is incorporated, domiciled and operates principally in the United Kingdom.
www.epwin.co.uk
Chairman's statement
Resilient performance
The Group's performance in 2017 has been resilient, and the actions taken by the Executive Team in response to the customer issues, as well as its continuing programme of consolidation and operational improvement, leave the Group in a stronger position from which to move forward with its strategy.
During 2017 the Group faced a number of external challenges; market conditions in the key Repair, Maintenance and Improvement ("RMI") sector have remained subdued and in addition to this, as has been previously reported, the Group had issues with its two largest customers.
Responding to external challenges
Market conditions and input cost inflation
As reported at the end of 2016, with continuing uncertainty around the eventual form of Brexit, market conditions during 2017 were expected to remain subdued, whilst material price inflation, primarily driven by the weakening of sterling against both the US Dollar and Euro has also had a significant impact on costs.
In response to this the Group accelerated its operational improvement programme aimed at adjusting capacity and the cost base, particularly in respect of the fabrication operations. In August the management team completed the consolidation of its two glass-sealed unit manufacturing operations onto one site in Northampton. This reduces the cost base whilst ensuring that capacity remains scalable and operations robust.
In addition, the Group commenced the consolidation of two further production facilities which it expects to complete later in 2018.
Customer issues
As reported at the 2017 half-year, one of the Group's two largest customers, Entu (UK) Plc ("Entu"), accounting for approximately 5% of Group revenues, entered administration in August 2017 leading to a bad debt charge of GBP3.9 million. The Epwin subsidiary primarily supplying Entu, Indigo Products Limited ("Indigo"), was sold in December 2017. The disposal of Indigo, along with a new three-year agreement signed with the new owner for the supply by the Group of window profile and other building products, represents a reasonable conclusion as well as reducing the Group's exposure to this customer.
The other significant customer issue highlighted was the sale by SIG Plc of its plastic distribution business to one of our competitors. SIG Plc was the Group's largest customer, accounting for approximately 5% of revenue. The full impact of this is yet to be determined.
New products
2017 saw a number of commercial successes with new products introduced in the previous 12 months, in particular the Profile 22 Optima window system and wood plastic composite ("WPC") products. In April 2016 the Group launched the new, award winning, Profile 22 Optima window system to great success. The system and team behind it have built a platform for new customer wins during 2017, the benefit of which will positively impact 2018.
Results
As a consequence of the market conditions, cost inflation and customer factors set out above, underlying operating profit reduced from GBP25.6 million in 2016 to GBP22.3 million in 2017. In addition to this the Group has incurred other non-underlying costs of GBP9.2 million, excluding the release of Stormking excess contingent consideration of GBP1.8 million, principally relating to the Entu bad debt write off and business re-organisation costs.
Consequently, although cash generation remains strong, pre-tax operating cash flow decreased to GBP19.9 million (2016: GBP30.8 million).
The Group remains conservatively funded, with net debt at the year-end of GBP25.1 million, (2016: GBP20.6 million), less than 1x adjusted EBITDA and well within covenant levels. The increase is principally as a result of the operating cash flow decrease, the settlement of GBP3.9 million of the cash element of deferred contingent consideration due on the 2015 acquisitions of Ecodek and Stormking Plastics, and the continued investment in fixed asset programmes to benefit the business in the future.
Dividends
The Board is recommending a final dividend of 4.46 pence per ordinary share to be paid on 4 June 2018 to shareholders on the register on 11 May 2018. Along with the interim dividend of 2.23 pence per ordinary share, paid in October 2017, this takes the full year dividend to 6.69 pence per ordinary share, an increase of 1.4% on 2016.
The Board has reviewed the Group's dividend policy, which was put in place at the IPO in 2014 and under which the group will have paid total dividends of GBP33.6 million since October 2014. The Board wishes to continue to offer an attractive dividend for shareholders whilst also ensuring that flexible and efficient funding is available for its growth and development plans. Therefore, to meet these two objectives, the board has agreed to adopt a policy for the future of offering a progressive dividend that is approximately twice covered by adjusted after tax profits.
People
On behalf of the Board and our shareholders I would like to thank all of our employees for the levels of commitment shown to the Group during a challenging year. Combined with the support from shareholders and the decisions taken by the Board, I believe that there is a strong foundation for all stakeholders for the years ahead.
Summary and outlook
2017 has demonstrated the resilience of the Group, its business model and strategy in the face of several external challenges. Looking ahead, market conditions, particularly in the key RMI sector, are expected to remain challenging in 2018 and uncertainty around the terms and impact of Brexit on the UK economy continue to have an impact on consumer confidence and input costs, as sterling remains weaker against both the US Dollar and Euro.
Despite these headwinds, the Board remains confident in the long-term market drivers for Epwin's products and considers that the operational improvements commenced during 2017 along with the Group's robust and flexible business model, with its broad and growing range of products and its routes to market, put the business in a strong position for future growth.
Andrew Eastgate
Chairman
11 April 2018
Business review
Strategic and operational review
2017 was a challenging year for the Group. In response to a subdued RMI market, and with ongoing uncertainty around Brexit, the Executive Team implemented actions to reduce excess capacity and accelerate opportunities to improve efficiency and introduce new products to our markets.
In H1 the decision was taken to consolidate our two glass-sealed unit manufacturing facilities on to the Northampton site. The consolidation was completed in H2 and ensures the Group has a robust manufacturing facility to meet both our internal and external customer requirements whilst operating on a more cost-efficient footprint. Further site consolidations are in progress.
In December 2017, in response to the Entu (UK) Plc ("Entu") administration, the Group disposed of its window fabrication operation, Indigo Products Limited ("Indigo"). Indigo was primarily engaged in fabricating window frames for Entu (UK) Plc, prior to that business entering administration. With the lease on the manufacturing facility due to expire in Q1 2018 and the ongoing capital expenditure requirements, the disposal of the business to the acquirer of the Entu business made commercial sense for Epwin. Alongside the transaction, a new three-year exclusive supply agreement for extruded plastic products has been agreed with the purchaser, the benefits of which will depend upon future order quantities.
The Group continues to add products and materials capability. We have launched our first aluminium products and are progressing our plans to enhance this range of products. Alongside this we have added, and will continue to add, further products to our existing systems, particularly for fenestration, roofline, rainwater and drainage, as well as identifying further complementary products to sell to our customer base.
With the new Profile 22 Optima product, the Epwin Window Systems business continues to reinforce its position in the market as well as expanding its Spectus and Swish window and door product ranges and operational capabilities. The market for window profile remains competitive, yet price increases were delivered in 2016, the first of significance for some years, and in 2017. However, significant material cost inflation continues to be a challenge across the Group and it will take time to pass on these cost increases in the current market conditions.
2017 has seen investment in a new logistics facility in Scunthorpe that is expected to become operational by the end of H1 2018 and will provide opportunity for further growth and rationalisation of existing sites, whilst improving the service offer for customers. A similar project is being planned in Telford for 2019 to improve logistical operational efficiency and to service customers with our growing product range.
Post year-end the Group acquired Amicus Building Products, a small chain of 15 building plastic distribution centres. The acquisition, for GBP0.5 million cash consideration, supports the supply of the Group's products into the market alongside our independent distributor customers to whom the Group remains committed for the diversity and flexibility that they are able to offer end customers.
Market overview and outlook
As anticipated, the RMI market remained subdued in 2017 with continuing uncertainty around the shape of the UK exit from the European Union, and inflation holding back real wage growth and dampening consumer confidence. While this is expected to continue through 2018, the Board remains confident in the long-term growth drivers of the RMI market and that there continues to be significant underinvestment by property owners in the repair and maintenance of the UK's housing stock.
As previously reported, of the UK's housing stock, 77% was built before 1980 (Office for National Statistics or "ONS"). At the current rate of newbuild construction, 80% of the domestic properties that the UK will have in 2050 have already been built (Green Building Council). Evidently, the need to invest in the condition of the UK's existing housing stock is becoming pressing, more so with the need to insulate homes more efficiently to meet climate change commitments and combat rising energy prices.
Within the fenestration industry, figures indicate that around 4.3 million window frames are replaced each year, across the UK's 26 million dwellings. This represents 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. Today's products offer significant benefits over those produced even just a decade ago and most of the installed population predates this by some way.
Similar dynamics are true for the cellular roofline business although it is also believed that further growth potential exists in this market as it has been estimated that cellular products have only c.50% penetration into the residential property market, with the balance still being largely installed with timber. Replacement of cellular roofline products will also represent an opportunity for rainwater product sales which are typically renewed at the same time.
The Wood Plastic Composite decking market is relatively new in the UK and we believe will continue to demonstrate good growth. The Glass Reinforced Plastic canopy and dormer market, whilst being more mature, has also grown impressively as new housebuilders in particular look to improve efficiency by simplifying the build process or moving to off-site manufacture.
Whilst the private new build market again exhibited growth in 2017, we believe it will be more subdued in 2018 as a consequence of weaker consumer confidence. Social housing new build and refurbishment continues to be constrained by government funding restrictions.
As reported during the year, events at the Group's two largest customers had a significant impact on results and required immediate and decisive action by the Board. The sale by SIG plc of its plastic distribution business to a vertically integrated competitor of the Group has impacted sales although we continue to retain a share of the business via alternative distributors. We continue to supply extruded products to the former Entu business under a three-year supply agreement, albeit at a lower volume, having disposed of the Indigo fabrication business in December.
In response to these events and market conditions the Group is continuing to add new products to its range and broaden its materials capability. We have launched our first aluminium product, further decking products, as well as added additional parts and components to our existing systems, supplementing our product range.
The Group's strategy remains 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. The Group's financial position remains strong with net debt less than one times adjusted EBITDA and with significant funding headroom to continue to invest in the business.
Jonathan Bednall
Chief Executive Officer
11 April 2018
Financial Review
Total revenue for the year ended 31 December 2017 increased to GBP298.3 million (2016: GBP293.2 million), driven by strong sales of new products, in particular the Group's new window system, Profile 22 Optima, launched in 2016, and the full year impact of the National Plastics acquisition.
Underlying operating profit was GBP22.3 million, down from GBP25.6 million in 2016 mainly as a result of the significant increases in material input costs caused by the continuing weakness of sterling against both the US Dollar and Euro, as well as the impact to both operations, and the wider market, of the Entu (UK) Plc administration and the sale by SIG Plc of its plastic distribution business.
2017 2016
GBPm GBPm
------------------------------------------- ------ ------
Revenue
------------------------------------------- ------ ------
Extrusion and Moulding 183.6 181.9
Fabrication and Distribution 114.7 111.3
------------------------------------------- ------ ------
Total 298.3 293.2
------------------------------------------- ------ ------
Underlying segmental operating profit
Extrusion and Moulding 21.5 24.5
Fabrication and Distribution 2.4 2.9
------------------------------------------- ------ ------
Underlying segmental operating profit
before corporate costs 23.9 27.4
Corporate costs (1.6) (1.8)
------------------------------------------- ------ ------
Underlying operating profit 22.3 25.6
Amortisation of acquired other intangible
assets (1.1) (1.1)
Other non-underlying items (7.4) (0.2)
Share-based payments expense (0.6) (0.3)
------------------------------------------- ------ ------
Operating profit 13.2 24.0
------------------------------------------- ------ ------
Extrusion and Moulding
-- Revenue increased slightly to GBP183.6 million (2016: GBP181.9 million) with higher sales of fenestration and decking products, driven by the introduction of new products, offset by lower roofline sales where the market has been erratic and highly competitive partly as a result of the sale by SIG Plc of their plastic distribution business.
-- Underlying segmental operating profit of GBP21.5 million was GBP3.0 million lower than 2016 primarily as a result of material cost inflation and the impact of the disposal by SIG Plc of their plastic distribution operations.
Fabrication and Distribution
-- Revenue increased to GBP114.7 million (2016: GBP111.3 million) mainly driven by the full year impact of the 2016 acquisition of National Plastics, offset by a reduction in glass sales as a result of the decision to focus on a more selective customer base and consolidate glass manufacturing operations on one site.
-- Underlying segmental operating profit of GBP2.4 million was down from GBP2.9 million in 2016, reflecting ongoing operational inefficiencies in the Fabrication businesses, disruption as a result of the Entu (UK) Plc administration and the lacklustre RMI market.
Non-underlying items
To assist users of the financial statements to understand underlying trading performance, non-underlying items have been excluded from operating profit in arriving at underlying operating profit. Non-underlying items include:
i. Amortisation of acquired other intangible assets
Amortisation of GBP1.1 million was charged during the year (2016: GBP1.1 million), relating to the brand and customer relationship intangible assets recognised on acquisitions.
ii. Other non-underlying items
Other non-underlying items include the bad debt charge in connection with the Entu (UK) Plc administration and the associated loss on disposal of Indigo Products Limited, the onerous lease provision and redundancy costs associated with the closure of the Newton Abbot glass plant, and costs and provisions for the closure of the Macclesfield extrusion facility as well as production facilities associated with a re-sizing of the Fabrication and Distribution business. These costs are offset by the release of excess contingent consideration relating to the 2015 acquisition of Stormking Plastics Limited. 2016 other non-underlying items relate to professional fees on the acquisition of National Plastics.
2017 2016
GBPm GBPm
----------------------------------- --- ------ ------
Acquisition expenses - 0.2
Entu (UK) Plc administration 3.9 -
bad debt charge
Loss on disposal of Indigo 0.4 -
Products Limited
Site consolidation and redundancy 4.9 -
Release of Stormking excess (1.8) -
contingent consideration
------------------------------------ ------ ------
7.4 0.2
----------------------------------- ---------- ------
iii. Share-based payments expense
Share-based payments include the IFRS 2: Share-based payments charge in respect of the new Long-Term Incentive plan, Management Incentive Plan and Save As You Earn ("SAYE") scheme.
Cash flow
2017 2016
GBPm GBPm
--------------------------------- ------- -------
Pre-tax operating cash flow 19.9 30.8
Tax paid (2.7) (3.8)
Acquisitions (3.9) (10.2)
Acquisition of other intangible
assets (0.7) (1.1)
Net capital expenditure (6.4) (11.6)
Net interest paid (1.0) (1.0)
Dividends (9.5) (9.1)
Other (0.2) (0.2)
Increase in net debt (4.5) (6.2)
--------------------------------- ------- -------
Opening net debt (20.6) (14.4)
--------------------------------- ------- -------
Closing net debt (25.1) (20.6)
--------------------------------- ------- -------
Pre-tax operating cash flow reduced by GBP10.9 million to GBP19.9 million (2016: GBP30.8 million) as a result of the investment in working capital, the bad debt associated with the Entu (UK) Plc administration and costs associated with business re-organisations.
Underlying operating cash conversion was 89% (2016: 120%). Without the effect of the Entu administration and business re-organisations this would have been 105%.
Acquisitions
The acquisition cash outflow of GBP3.9 million represents the payment of the cash element of contingent consideration in relation to the 2015 acquisitions of Ecodek (GBP2.3 million) and Stormking Plastics (GBP1.6 million). No further contingent consideration is due on these acquisitions.
Financing
The Group's banking facilities comprise a GBP15 million amortising term loan, GBP35 million revolving credit facility and GBP5 million overdraft. The term loan and revolving credit facility are for a term of four years ending December 2019. As at 31 December 2017 the Group had drawn down GBP30.0 million of these facilities (31 December 2016: GBP30.0 million). The Group operates well within facilities and current banking covenants.
Dividends
The Board is recommending a final dividend of 4.46 pence per ordinary share to be paid on 4 June 2018 to shareholders on the register on 11 May 2018. Along with the interim dividend of 2.23 pence per ordinary share, paid in October 2017, this takes the full year dividend to 6.69 pence per ordinary share.
Christopher Empson
Group Finance Director
11 April 2018
Consolidated income statement for the year ended 31 December 2017
2017 2016
Note GBPm GBPm
----------------------------- ----- -------- --------
Revenue 2 298.3 293.2
----------------------------- ----- -------- --------
Cost of sales (207.5) (200.6)
----------------------------- ----- -------- --------
Gross profit 90.8 92.6
Distribution expenses (29.7) (27.8)
Administrative expenses (47.9) (40.8)
Underlying operating
profit 22.3 25.6
Amortisation of acquired
other intangible assets 4 (1.1) (1.1)
Other non-underlying
items 4 (7.4) (0.2)
Share-based payments
expense 4 (0.6) (0.3)
----------------------------- ----- -------- --------
Operating profit 13.2 24.0
Net finance costs (1.2) (1.0)
----------------------------- ----- -------- --------
Profit before tax 12.0 23.0
Taxation 5 (1.9) (3.4)
----------------------------- ----- -------- --------
Profit for the year and
total comprehensive income 10.1 19.6
----------------------------- ----- -------- --------
Earnings per share pence pence
Basic 6 7.08 13.85
Diluted 6 7.08 13.77
----------------------------- ----- -------- --------
Consolidated balance sheet as at 31 December 2017
2017 2016
GBPm GBPm
------------------------------- ------ ------
Assets
Non-current assets
Goodwill 65.7 65.7
Other intangible assets 3.9 4.5
Property, plant and equipment 36.0 37.9
Deferred tax 0.6 0.4
--------------------------------- ------ ------
106.2 108.5
Current assets
Inventories 29.6 28.2
Trade and other receivables 45.3 41.4
Cash and cash equivalents 7.3 13.0
--------------------------------- ------ ------
82.2 82.6
Total assets 188.4 191.1
--------------------------------- ------ ------
Liabilities
Current liabilities
Other interest-bearing
loans and borrowings 21.0 16.3
Trade and other payables 54.7 53.1
Contingent consideration - 7.3
Income tax payable 1.4 2.0
Provisions 2.1 0.5
--------------------------------- ------ ------
79.2 79.2
Non-current liabilities
Other interest-bearing
loans and borrowings 11.4 17.3
Provisions 4.1 3.7
--------------------------------- ------ ------
15.5 21.0
Total liabilities 94.7 100.2
--------------------------------- ------ ------
Net assets 93.7 90.9
--------------------------------- ------ ------
Equity
Ordinary share capital 0.1 0.1
Share premium 12.5 12.5
Merger reserve 25.5 23.9
Retained earnings 55.6 54.4
--------------------------------- ------ ------
Total equity 93.7 90.9
--------------------------------- ------ ------
--
Consolidated statement of changes in equity for the year ended 31 December 2017
Share Share Merger Retained
capital premium reserve earnings Total
GBPm GBPm GBPm GBPm GBPm
----------------------------- --------- --------- --------- ---------- ------
Balance as at 31 December
2015 0.1 12.5 23.9 43.6 80.1
------------------------------ --------- --------- --------- ---------- ------
Comprehensive income:
Profit for the year - - - 19.6 19.6
------------------------------ --------- --------- --------- ---------- ------
Total comprehensive
income: - - - 19.6 19.6
------------------------------ --------- --------- --------- ---------- ------
Transactions with
owners recorded directly
in equity:
Issue of shares - - - - -
Share-based payments
expense - - - 0.3 0.3
Dividends - - - (9.1) (9.1)
------------------------------ --------- --------- --------- ---------- ------
Total transactions
with owners - - - (8.8) (8.8)
------------------------------ --------- --------- --------- ---------- ------
Balance as at 31 December
2016 0.1 12.5 23.9 54.4 90.9
------------------------------ --------- --------- --------- ---------- ------
Comprehensive income:
Profit for the year - - - 10.1 10.1
------------------------------ --------- --------- --------- ---------- ------
Total comprehensive
income: - - - 10.1 10.1
------------------------------ --------- --------- --------- ---------- ------
Transactions with
owners recorded directly
in equity:
Issue of shares - - 1.6 - 1.6
Share-based payments
expense - - - 0.6 0.6
Dividends - - - (9.5) (9.5)
------------------------------ --------- --------- --------- ---------- ------
Total transactions
with owners - - 1.6 (8.9) (7.3)
------------------------------ --------- --------- --------- ---------- ------
Balance as at 31 December
2017 0.1 12.5 25.5 55.6 93.7
------------------------------ --------- --------- --------- ---------- ------
Consolidated cash flow statement for the year ended 31 December 2017
2017 2016
GBPm GBPm
------------------------------------- ------- -------
Cash flows from operating
activities
Profit for the year 10.1 19.6
Adjustments for:
Depreciation and amortisation 9.1 8.8
Loss on disposal of property, 0.2 -
plant and equipment
Loss on disposal of subsidiary 0.4 -
Net finance costs 1.2 1.0
Taxation 1.9 3.4
Share-based payments expense 0.6 0.3
--------------------------------------- ------- -------
Operating cash flow before
movement in working capital 23.5 33.1
(Increase) in inventories (1.9) (2.4)
(Increase)/decrease in trade
and other receivables (4.3) 1.4
Increase/(decrease) in trade
and other payables 0.6 (1.0)
Increase/(decrease) in provisions 2.0 (0.3)
--------------------------------------- ------- -------
Pre-tax operating cash flow 19.9 30.8
Tax paid (2.7) (3.8)
--------------------------------------- ------- -------
Net cash inflow from operating
activities 17.2 27.0
--------------------------------------- ------- -------
Cash flow from investing activities
Acquisition of subsidiary,
net of cash acquired (3.9) (10.2)
Acquisition of property, plant
and equipment (6.4) (11.6)
Acquisition of other intangible
assets (0.7) (1.1)
--------------------------------------- ------- -------
Net cash outflow from investing
activities (11.0) (22.9)
--------------------------------------- ------- -------
Cash flow from financing activities
Interest paid (1.0) (1.0)
Repayment of borrowings - (5.0)
Capital element of finance
lease rental payments (1.4) 1.9
Dividends paid (9.5) (9.1)
--------------------------------------- ------- -------
Net cash outflow from financing
activities (11.9) (13.2)
--------------------------------------- ------- -------
Net decrease in cash and cash
equivalents (5.7) (9.1)
Cash and cash equivalents
at the beginning of year 13.0 22.1
--------------------------------------- ------- -------
Cash and cash equivalents
at end of year 7.3 13.0
--------------------------------------- ------- -------
Secured bank loans (29.8) (29.7)
Finance lease liabilities (2.6) (3.9)
--------------------------------------- ------- -------
Net debt (25.1) (20.6) --------------------------------------- ------- ------- 1. Basis of preparation
Whilst the financial information included in this Preliminary Announcement has been prepared on the basis of the requirements of International Financial Reporting Standards (IFRSs) in issue, as adopted by the European Union, this announcement does not itself contain sufficient information to comply with IFRSs.
The Group expects to publish full Consolidated Financial Statements in April 2018. The financial information set out in this Preliminary Announcement does not constitute the Group's Consolidated Financial Statements for the years ended 31 December 2017 or 2016, but is derived from those Financial Statements which were approved by the Board of Directors on 10 April 2018. The auditor, KPMG LLP, has reported on the Group's Consolidated Financial Statements and the report was unqualified and did not contain a statement under section 498 (2) or 498 (3) of the Companies Act 2006.
The statutory financial statements for the year ended 31 December 2017 have not yet been delivered to the Registrar of Companies and will be delivered following the Company's Annual General Meeting.
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the "Group"). The Group financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs").
The Group's accounting policies are set out in the 2016 Annual Report and Accounts and have been applied consistently in 2017.
The financial statements are prepared on the historical cost basis except where Adopted IFRSs require an alternative treatment.
Going concern
The Group financial statements are prepared on a going concern basis as the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group has considered its financial resources, together with the ongoing trading performance and cash generation. The bank facilities are available until December 2019. The Group has prepared a detailed business plan, including cash projections, for the period to 31 December 2018 and has applied sensitivities to these plans. These plans, and sensitised forecasts, demonstrate that the Group's current facilities provide adequate headroom for its current and future anticipated cash requirements.
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. The Chief Operating Decision Maker is considered to be the Board of Directors.
Reportable segments Operations
Extrusion and Moulding Extrusion and marketing of PVC window profile systems, PVC 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, cellular roofline, cladding, rainwater and drainage products, and manufacture of glass sealed units.
2017 2016
GBPm GBPm
----------------------------------- ------- -------
Revenue from external customers
----------------------------------- ------- -------
Extrusion and Moulding - total
revenue 211.3 206.8
Inter-segment revenue (27.7) (24.9)
------- -------
Extrusion and Moulding - external
revenue 183.6 181.9
Fabrication and Distribution
- total revenue 114.8 111.3
Inter-segment revenue (0.1) -
------- -------
Fabrication and Distribution
- external revenue 114.7 111.3
------------------------------------ ------- -------
Total revenue from external
customers 298.3 293.2
------------------------------------ ------- -------
Segmental operating profit
Extrusion and Moulding 21.5 24.5
Fabrication and Distribution 2.4 2.9
------------------------------------ ------- -------
Segmental operating profit before
corporate costs 23.9 27.4
Corporate costs (1.6) (1.8)
------------------------------------ ------- -------
Underlying operating profit 22.3 25.6
Amortisation of acquired other
intangible assets (1.1) (1.1)
Other non-underlying items (7.4) (0.2)
Share-based payments expense (0.6) (0.3)
------------------------------------ ------- -------
Operating profit 13.2 24.0
Net finance costs (1.2) (1.0)
------------------------------------ ------- -------
Profit before tax 12.0 23.0
------------------------------------ ------- -------
3. Acquisition and disposal of subsidiaries
Disposal in the year ended 31 December 2017
On 31 December 2017 the Group disposed of its entire shareholding in Indigo Products Limited ("Indigo") for consideration of GBP1. Indigo was primarily engaged in fabricating window frames for Entu (UK) Plc. Following the administration of Entu (UK) Plc and the resulting significant bad debt, management no longer considered it viable to continue investing in the Indigo operation.
The acquirer, Indigo Acquisitions Limited, is wholly owned by Brian Kennedy, who is also a shareholder of Epwin Group Plc.
During the year to 31 December 2017, the Indigo operation contributed revenues of GBP14.4 million and an operating loss of GBP3.3 million.
A loss of GBP0.4 million arose on the disposal of Indigo, included in the income statement within non-underlying items, see note 4.
Settlement of contingent consideration
During the year to 31 December 2017 the Group settled contingent consideration payable in relation to the 2015 acquisitions of Vannplastic Limited ("Ecodek") and Stormking Plastics Limited ("Stormking").
The contingent consideration on Ecodek was settled in line with the contingent consideration provision as at 31 December 2016 being GBP3.3 million, split GBP2.3 million cash and GBP1.0 million shares.
The contingent consideration on Stormking was GBP2.2 million, split GBP1.6 million cash and GBP0.6 million shares. The settlement amount was GBP1.8 million less than the contingent consideration provision at 31 December 2016 resulting in a credit to the income statement, within non-underlying items, of this amount, see note 4.
There are no further contingent consideration payments due.
4. Non-underlying items
Non-underlying items included within operating profit include:
2017 2016
GBPm GBPm
------------------------------ ----- -----
Amortisation of acquired
other intangible assets 1.1 1.1
Other non-underlying items 7.4 0.2
Share-based payments expense 0.6 0.3
-------------------------------- ----- -----
Expense 9.1 1.6
-------------------------------- ----- -----
Amortisation of acquired other intangible assets
GBP1.1 million (2016: GBP1.1 million) amortisation of brand and customer contract intangible assets acquired through business combinations.
Other non-underlying items
Other non-underlying items include:
2017 2016
GBPm GBPm
----------------------------------- ---- ------ ------
Acquisition expenses - 0.2
Entu (UK) Plc administration 3.9 -
bad debt charge
Loss on disposal of Indigo 0.4 -
Products Limited
Site consolidation and redundancy 4.9 -
Release of Stormking excess (1.8) -
contingent consideration
------------------------------------ --- ------ ------
7.4 0.2
---- ----------------------------------- ------ ------
Share-based payments expense
The share-based payments expense of GBP0.6 million (2016: GBP0.3 million) comprises IFRS 2: Share-based payments charges in respect of the: Management Incentive Plan GBPnil (2016: GBP0.2 million), Long-Term Incentive Plan GBP0.5 million (2016: GBPnil) and SAYE schemes of GBP0.1 million (2016: 0.1 million).
5. Taxation
2017 2016
GBPm GBPm
--------------------------- ------ ------
Current tax expense
Current period 2.6 3.9
Prior period (0.5) (0.5)
--------------------------- ------ ------
Total current tax charge 2.1 3.4
Deferred tax expense
Current period (0.4) (0.1)
Prior period 0.2 0.1
--------------------------- ------ ------
Total deferred tax charge (0.2) -
Total tax expense 1.9 3.4
--------------------------- ------ ------
UK corporation tax is calculated at 19.25% (2016: 20.00%) of the estimated assessable profit for the year.
The Group's total income tax charge is reconciled with the standard rates of UK corporation tax for the year of 19.25% (2016: 20.00%) as follows:
2017 2016
GBPm GBPm
------------------------------------- ------ ------
Profit before tax 12.0 23.0
-------------------------------------- ------ ------
Tax at standard UK corporation
tax rate of 19.25% (2016: 20.00%) 2.3 4.6
Factors affecting the charge
for the period:
Expenses not deductible 0.3 0.1
Non-taxable income (0.4) -
Losses utilised for which no
deferred tax previously recognised (0.2) (0.6)
Difference in tax rate 0.2 (0.3)
Prior period (0.3) (0.4)
-------------------------------------- ------ ------
1.9 3.4
------------------------------------- ------ ------
Factors that may affect future current and total tax charges
The UK corporation tax rate reduced from 20% to 19% effective from 1 April 2017. A further reduction to 17% effective from 1 April 2020 was substantively enacted on 6 September 2016. This will reduce the Company's future current tax charge accordingly. The deferred tax asset at 31 December 2017 has been calculated based on these rates.
6. Earnings per share (EPS)
Basic earnings per share are calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period. The weighted average number of shares has been adjusted for the issue and cancellation of shares during the period.
Diluted earnings per share are calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period, plus the dilutive potential ordinary shares arising from share options in issue at the end of the period.
2017 2016
EPS summary Pence Pence
---------------------------- ------ ------
Basic EPS
Basic earnings per share 7.08 13.85
Diluted EPS
Diluted earnings per share 7.08 13.77
2017 2016
Number of shares No. No.
---------------------------- ------------ ------------
Weighted average number of
ordinary shares (basic) 142,573,041 141,518,595
Effect of share
options in issue 105,352 829,487
-------------------------------- ------------ ------------
Weighted average number of
ordinary shares (diluted) 142,678,393 142,348,082
------------------------------ ------------ ------------
7. Dividends
2017 2017 2016 2016
GBPm Pence per GBPm Pence per
share share
---------------------- ----- ---------- ----- ----------
Previous year
final dividend 6.3 4.40 6.0 4.25
Current year interim
dividend 3.2 2.23 3.1 2.20
---------------------- ----- ---------- ----- ----------
9.5 9.1
---------------------- ----- ---------- ----- ----------
8. Cautionary statement
This Report contains certain forward-looking statements with respect of the financial condition, results, operations and business 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 Report should be construed as a profit forecast.
9. Annual General Meeting
The Annual General Meeting of the Company will be held on 22 May 2018 at Eversheds Sutherland (International) LLP, 115 Colmore Row, Birmingham B3 3AL.
10. Electronic communications
The full Annual Report and Accounts for the year ended 31 December 2017 are to be published on the Company's website, together with the Notice convening the Company's 2018 Annual General Meeting by 24 April 2018. Copies will also be sent out to those shareholders who have elected to receive paper communications. Copies can be requested by writing to the Company Secretary, Epwin Group Plc, 1b Stratford Court, Cranmore Boulevard, Solihull, B90 4QT or email to investors@epwin.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GGUACCUPRPUU
(END) Dow Jones Newswires
April 11, 2018 02:00 ET (06:00 GMT)
1 Year Epwin Chart |
1 Month Epwin Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
