12th Sep 2018 12:39
LONDON (Alliance News) - Epwin Group PLC on Wednesday reported a decrease in interim profit and revenue due to the "adverse weather" experienced early in the period, resulting in a lower payout for shareholders.
In the six months ended June, the building products manufacturer posted a pretax profit of GBP5.4 million, down from the GBP7.5 million reported the year before.
Epwin's first half revenue decreased to GBP142.9 million from GBP149.9 million, but the company stressed that this was "better than anticipated", "demonstrating the group's resilience" after it lost two of its largest customers in the second half of 2017.
The company said materials and labour cost inflation "continues to impact the industry". Epwin said price increases are being implemented to address it, but in "challenging market conditions".
Both of the company's divisions - Extrusion & Moulding and Fabrication & Distribution - posted decreased revenue in the period.
Extrusion & Moulding's revenue decreased to GBP88.5 million from GBP91.5 million. This was due to losing the plastic distribution business of SIG PLC at the end of 2017. This resulted in a GBP7.5 million revenue hit compared to a year before and cut segmental revenue by GBP6.8 million.
Fabrication & Distribution's revenue decreased to GBP53.9 million from GBP58.4 million. Resizing the fabrication business in 2017 due to "subdued market conditions" were blamed for the revenue dip. The division also suffered from the loss of the SIG business and also from Entu UK PLC entering administration in 2017, resulting in the disposal of Indigo Products Ltd.
Epwin declared an interim dividend of 1.70 pence per share, down from 2.23p.
Looking ahead, the company believes it remains in a "strong" financial position with "good" cash generation, which gives it "significant funding headroom" to continue to invest in the company and its strategy.
Epwin anticipates adjusted pretax profit for the full year will be in line with market expectations. In the half, adjusted pretax profit was GBP6.4 million, down from GBP10.5 million, and for 2017 it was GBP21.1 million.
Chief Executive Officer Jon Bednall said: "Trading in the first half year has been satisfactory, despite challenging market conditions and cost inflation. The site consolidation and development programme which commenced in late 2017 is progressing and is expected to be completed in the second half of 2019. Alongside these programmes we have continued the work necessary to broaden our product portfolio and invest in our operations for future growth.
"We remain confident in the long-term prospects for the repair, maintenance & improvement market and are continuing to progress our strategy, focused on operational improvement, selective acquisitions, product range expansion and development. We are confident in continuing our record of strong cash generation and our ability to offer an attractive return to shareholders."
Shares in Epwin were up 6.7% Wednesday at 80.64 pence each.
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