LONDON (ShareCast) - (ShareCast News) - Epwin Group said first half revenues and operating profits were in line with expectations despite challenging market conditions, particularly in the Repair, Maintenance and Improvement market, but warned on its full-year numbers while noting "changing circumstances" at two clients.
However, increased cost of materials continued to be an issue.

As well, the low maintenance building products manufacturer noted "changing circumstances" within its customer base affecting two of its customers, each accounting for approximately 5% of the group's revenue, one with significant funding issues, and the other undertaking a strategic review having sold its plastic distribution business (to one of Epwin's rivals).

Yet Jon Bednall, the chief executive, said the group was confident that it would continue its "record of strong cash generation and our ability to offer an attractive dividend to shareholders".

In its trading statemet, the group also said its financial position remained strong, pointing out its low level of gearing, with net debt standing at less than one times its 2016 EBITDA profits, which it said provided significant funding headroom to continue investing in the business.

With that aim in mind, and in response to the ongoing market conditions, since the half-year the company had begun to adjust its capacity and cost base.

Be that as it may, one analyst described the two-part profit warning as "dramatic".

Then current market conditions were a common theme running across builders merchants, according to the same analyst, but the second part of the warning, relating to the risk of losing the two distribution clients, was company-specific.

Bednall, said: "Whilst the current market conditions continue to be challenging, we remain confident of the long term growth drivers in the RMI market and continue to progress with our strategy, focused on operational improvement, selective acquisitions to broaden our product portfolio, cross‐selling across our brands and product development".

Epwin set Wednesday 13 September 2017 as the release date for its half-year results.

As of 1536 BST the company's shares had crashed -19.47% to 76.55p, setting a new 52-week low in the process.

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