Coming either side of the Brexit result, H116 pre-close comments were less clear about FY16 prospects than those made at the AGM. Focus on operational improvements and the integration of 2015 acquisitions is continuing and progress will be the key determinant of the full-year outcome. Our estimates are unchanged and we continue to expect a good step forward in FY16 earnings.
Natural caution, limited visibility
In the first quarter of 2016, we felt that other UK RMI sector building products suppliers tended towards more positive guidance than Epwin’s view of generally flat markets. At the subsequent AGM (24 May), management maintained existing FY16 guidance without commenting further on market conditions at that time and has most recently confirmed that H116 trading met expectations. Since the Brexit announcement, commentators have cited increased uncertainty and Epwin Group PLC (LON:EPWN) has echoed this. It operates with relatively short order visibility with products feeding into different stages of build cycles and exposure to trends across the range of market segments served. At some point, weaker sterling may result in some price pressure from polymer materials ultimately linked to US dollar feedstock costs.
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