Epwin Group Plc (LON:EPWN), the leading manufacturer of low maintenance building products, supplying the Repair, Maintenance and Improvement (“RMI”), new build and social housing sectors, has announced its year-end trading update in respect of the year ended 31st December 2020.
Trading update
Further to the announcement on 16 December 2020, the Group is pleased to report that trading remained strong through to the end of the year, particularly from the RMI sector, with new build and social housing orders also picking up. As a result, revenues for FY 2020 will be around £240m with adjusted profit before tax also in line with recently upgraded market consensus, subject to audit.
Net debt as at 31 December 2020 (on a pre-IFRS 16 basis) was c. £18m.
Trading since the start of 2021 has recommenced briskly with no significant Brexit or third lockdown related impact to date. The Board will provide a further update on current trading at the full year results announcement.
The Board continues to be mindful of the importance of dividends to shareholders and anticipates recommending the payment of a final dividend for the year ending 31 December 2020.
Delivering on our strategy
As previously announced, construction of the Group’s new logistics and product finishing facility in Telford was completed on time and on budget in 2020 and the facility commenced operations at the end of the year. Full commissioning of this facility was delayed as a result of the impact of the Pandemic. This will further enhance Group operations during 2021 with the benefits expected to be delivered from the second half.
The Group now has enhanced supply arrangements in place. This has enabled it to largely overcome the raw materials shortages faced by the industry as market demand spiked in H2 2020, particularly for the supply of PVC resin.
Acquisition
In line with the Group’s strategic objectives, on 5 January 2021, the Group acquired the trade and related assets of SBS (Cumbria) Limited (“SBS”), a leading and well-established distributor of plastic building products operating across eight branches in Cumbria and Southern Scotland.
SBS was acquired for £3.8m on a cash and debt free basis. In the year to February 2020, SBS revenues were around £6m. Including synergistic benefits we anticipate an EBITDA multiple of four times, with the full benefits of the acquisition being realised from the end of 2021. This acquisition further increases the geographical coverage of the Group’s plastic distribution business, offers the opportunity for synergies and wider expansion over time alongside the Group’s key partnerships with independent distributors.
Jon Bednall, Epwin Group Chief Executive Officer, said:
“I am pleased with the Group’s overall performance for 2020, as we adapted successfully to the challenges presented by Covid-19. I am also delighted with the progress we have made on our strategic priorities through the acquisition of SBS and the completion of the construction of the Telford logistics facility and finishing plant.
“We have had a brisk start to the current financial year, with the medium and long-term drivers of our markets remaining strong.”
