Epwin Group PLC, a leading manufacturer of energy efficient and low maintenance building products, has announced its unaudited half-year results for the six months to 30 June 2023. Despite challenging market conditions, the company reported strong trading, with revenue of £180.0 million, slightly ahead of the same period in 2022. Underlying operating profit was £11.9 million, a 11% increase from H1 2022, and the underlying operating margin improved by 60 basis points. The margin recovery was driven by pricing actions, operational improvement, easing raw material price inflation, and cost management. The company also generated positive cash flow, with pre-tax operating cash flow of £19.1 million and underlying operating cash conversion of 160%.
Epwin Group PLC maintained a robust financial position, with over £60 million headroom on banking facilities to support strategic objectives. The company renewed its banking facilities, including a £65 million Sustainability Linked Loan facility and a £10 million overdraft facility. Covenant net debt was reduced to £16.1 million from £17.9 million as at 31 December 2022, primarily due to strong operational cash flows. The covenant net debt to adjusted EBITDA ratio was 0.6x, well within covenant limits and unchanged from the year-end. The company declared an interim dividend of 2.00 pence per share, a 5% increase from H1 2022.
In terms of operational and strategic headlines, Epwin Group PLC reported that inflationary pressures were easing, although PVC resin prices remained elevated. The company continued to actively manage labor, energy, and other inflationary cost pressures. The company made progress in delivering its strategy, including the consolidation of decking manufacturing to a single site and the integration of the distribution network and consolidation of IT systems. Epwin Group PLC also focused on new product development, value-enhancing acquisitions, and sustainability initiatives.
Looking ahead, the company stated that Q3 trading has been encouraging, with profitability ahead of 2022. RMI demand has remained robust, and the company's broad product range, diverse customer base, well-invested operations, flexible cost base, longstanding supplier relationships, and strong balance sheet provide resilience against potential macro-economic headwinds. The Board remains confident of delivering a 2023 result in line with market consensus expectations and believes that the medium and long-term drivers for the company's markets remain positive.