Epwin Grp Share News (EPWN)

(Sharecast News) - Epwin Group reported resilient trading for the first half on Wednesday, despite a challenging market environment.

The AIM-traded company, a manufacturer of energy-efficient building products, posted an underlying operating margin improvement to 7.6%, up from 6.6% in the first half of 2023.

While revenues were lower than the prior year due to reduced PVC input prices and subdued demand, Epwin managed to deliver an underlying operating profit slightly ahead of 2023.

The group said it remained highly cash-generative, with pre-tax operating cash inflows of £15.8m, as it maintained a strong financial position.

Covenant net debt stood at £19.5m, equivalent to 0.6x adjusted EBITDA, with over £55m in available banking headroom.

In addition, Epwin extended its banking facilities to August 2027, supporting its strategic growth objectives.

Shareholder returns were also bolstered during the period, with £7.3m returned through dividends and a share buyback programme.

The company declared an interim dividend of 2.1p per share, a 5% increase on the prior year.

It said the buyback programme, announced in April, was nearing completion, adding that it intended to extend it by repurchasing an additional five million shares.

Operationally, Epwin said it continued to focus on improving efficiency, with the completion of a new IT system rollout across its distribution network.

The firm was also expanding through acquisitions, including a trade counter network in Scotland and a GRP moulding business, while actively pursuing more acquisition opportunities.

Looking ahead, Epwin said it expected full-year results to align with market expectations, although demand was likely to remain subdued through the second half.

The group said it was well-positioned for growth once market conditions improved, driven by long-term factors such as the UK's housing shortage, the need for improved social housing, and the push for decarbonisation to meet net-zero targets.

"Trading in the first half was consistent with the board's expectations, with underlying profit in line with a strong 2023 comparative, despite challenging markets," said chief executive officer Jon Bednall.

"We remain confident of achieving our full year expectations, with a further year of profit progression and business development."

Bednall said the company retained a positive view of its future prospects, and believed a market recovery was now more likely during 2025.

"Looking further ahead, the medium and long‐term drivers for the group's products continue to be positive, whilst our strong balance sheet will enable us to continue to invest for growth both organically and by selective acquisitions."

At 1424 BST, shares in Epwin Group were down 3.03% at 96p.

Reporting by Josh White for Sharecast.com.