29 September 2025

Epwin Group Plc

("Epwin" or the "Group")

Half year results for the six months to 30 June 2025

Strong performance in subdued markets

Epwin Group Plc (AIM: EPWN) ("Epwin" or the "Group"), the leading manufacturer of energy efficient and low maintenance building products, with significant market shares, supplying the Repair, Maintenance and Improvement ("RMI"), new build and social housing sectors, announces its unaudited half year results for the six months to 30 June 2025 ("H1 2025").

Financial highlights

(1) Stated before amortisation of acquired other intangible assets, share-based payments and other non-underlying items.

(2) Covenant net debt and covenant net debt to adjusted EBITDA represent pre-IFRS 16 measures.

(3) Underlying operating cash conversion is pre-tax operating cash flow as a percentage of underlying operating profit.

Financial headlines

·    Trading remains resilient despite subdued market conditions:

o  Trading remained resilient in the first half, as revenues increased by 9% to £172.5 million (HY24: £158.0 million) driven by increased volumes (6%) and the impact of 2024 and 2025 acquisitions (3%)

o  Continued management of balance between volume and margin to deliver underlying operating profit ahead of a strong prior year comparative, albeit margins have come under pressure from weaker market conditions and the impact of the increases in employers' National Insurance and the National Living Wage

o  Group remains highly cash generative, with pre-tax operating cash inflow of £18.7 million (HY24: £15.8 million) and underlying operating cash conversion of 150%

·    Robust financial position:

o  Covenant net debt of £19.0 million remains low at 0.6x adjusted EBITDA; the increase from year end (FY24: £15.4 million) being due to working capital seasonality, in addition to £2.4 million being deployed on the share buyback programme, £1.1 million cash cost of acquisitions and payment of the £4.1 million 2024 final dividend

o  Robust balance sheet, with more than £55 million headroom on banking facilities to support strategic objectives

o  Banking facilities recently extended to August 2028  

·    Delivering shareholder returns:

o  Share buyback programme now complete - in total 11 million shares repurchased and cancelled at a cost of £9.9 million

o  Recommended cash acquisition of Epwin by Laumann UK, announced on 7 August 2025 and approved by shareholders on 25 September 2025, at a price of £1.20 per ordinary share affords Epwin shareholders the opportunity to realise their investments at a significant premium to the undisturbed market price

o  Reflecting on more than 10 years on AIM:

§ Strong track record of financial performance - consistently meeting or beating expectations, delivering growth (increased Group revenues by c.25% and pre-IFRS 16 adjusted EBITDA by c.40% since listing)

§ c.£88 million invested in capital expenditure - maintaining best-in-class manufacturing facilities

§ 14 value-enhancing acquisitions completed - supporting the Group's strategic objectives

§ c.£79 million returned to shareholders in dividends and buybacks

Operational and strategic headlines

·    Continued delivery of our strategy, with a focus on the fundamentals as we navigate a backdrop of challenging market conditions:

o  Focus on operational and manufacturing efficiency continuing to drive benefits, partially offset by increased labour costs and the inflationary impact of government policy throughout our supply chain

o  Bolt-on acquisition completed expanding geographic coverage of trade counter network - a healthy pipeline of potential acquisitions remains

o  Sustainability credentials remain strong as we continue to focus on energy usage, production efficiency and increased processing of recycled materials

Current trading and outlook

·    Q3 trading to date has followed a similar trend to the first half of the year, in line with the Board's expectations

·    No significant improvement in market conditions expected in 2025, with macroeconomic uncertainty impacting key markets ahead of the Autumn Budget

·    Continuing to focus on responsibly managing the balance between volume and margin, maintaining market-leading customer service levels and product offering alongside driving further operational efficiencies and investment in our strategy

·    Medium and long-term drivers for the Group's markets remain positive:

o  Shortage of new and affordable homes - government committed to increasing the number of homes built

o  Poorly maintained, underinvested and ageing housing stock

o  Increasing concern about the quality of social housing

o  Net zero driving need to decarbonise the UK housing stock and improve the energy efficiency of homes 

Contact information

About Epwin

Epwin is the leading manufacturer of energy efficient and low maintenance building products, with significant market shares, supplying the Repair, Maintenance and Improvement ("RMI"), new build and social housing sectors.

The Company is incorporated, domiciled and operates principally in the United Kingdom.

Information for investors can be accessed at www.epwin.co.uk/investors

Group business review

Trading and results

The Group is pleased to report another strong performance in challenging markets. Demand remained subdued in the RMI market during the first half of the year, driven by ongoing macroeconomic challenges and weak consumer confidence, although there were signs of modest improvement in some of our new build facing businesses. Against this difficult backdrop, the Board notes that the Group again adapted well, delivering improved revenue and profit compared to H1 2024.

Revenue of £172.5 million represented a 9% increase compared to H1 2024 (HY24: £158.0 million), driven by increased volumes and the full year impact of 2024 and 2025 acquisitions, which contributed £4.7 million. As anticipated, aggressive competitor pricing is putting pressure on margins in some parts of the business and the Group continues to take a balanced approach to pricing to protect both profit margins and market share.

Underlying operating profit of £12.5 million was an improvement on the comparative period (HY24: £12.0 million), although underlying operating margin of 7.2% represents a slight decrease compared to H1 2024 (HY24: 7.6%). While a focus on operational and manufacturing efficiency continues to provide a margin benefit, cost inflation is putting pressure on overheads, particularly following the well-publicised increases to employers' National Insurance and the National Living Wage. The Group continues to implement pricing actions where necessary to pass on increased costs and protect margins, as far as possible in the current environment.

Key financials

Segmental results

Extrusion and moulding

·    H1 2025 demonstrated the resilience of our extrusion and moulding segment as revenues increased by 7% compared to the comparative period, of which 3% was due to the contribution of 2024 acquisitions

·    Steps taken by our manufacturing businesses on operational efficiency and cost control in 2024, and continuing in 2025, contributed to a modest improvement in underlying operating margin to 11.4% (HY24: 11.3%)

·    Competitive pricing pressures, which were a significant factor within the fabrication and distribution segment throughout 2024 and particularly for our trade counter businesses, were increasingly felt by our upstream manufacturing businesses during H1 2025. This impacted our ability to fully pass on increased costs during the period

Fabrication and distribution

·    Revenues increased by 12% compared to the comparative period, predominantly driven by our social housing facing window fabrication operation, who again saw an improvement in demand

·    Volumes in our distribution network remained steady, although subdued, against a backdrop of weak RMI demand. The enhanced functionalities of the Intact iQ system, implemented in 2024, enabled our trade counter businesses to be more agile and responsive in this challenging competitive environment, to deliver operating margins in line with H1 2024

Cash flow

Operating cash flows

The Group remains highly cash generative, achieving a pre-tax operating cash flow of £18.7 million (HY24: £15.8 million), representing an underlying operating cash conversion of 150%. The first half of 2025 saw an expected seasonal increase in working capital due to seasonality.

Investing cash flows

Capital expenditure of £3.3 million (HY24: £4.3 million) represents a decrease compared to H1 2024. The Group continues to invest in line with its strategic objectives, alongside ongoing replacement of plant and machinery as needed.

In addition, the Group spent £1.1 million on a bolt-on acquisition, further expanding the geographic coverage of its trade counter network.

Financing cash flows

The interest cost of £1.3 million (HY24: £1.4 million) was broadly in line with the prior year.

Covenant net debt has increased to £19.0 million from £15.4 million as at 31 December 2024, primarily due to the expected increase in working capital during the first half of the year, the payment of the final dividend in respect of 2024 of £4.1 million and a £2.4 million net outflow relating to the purchase of own shares under the share buyback programme.

At 30 June 2025, the Group had in excess of £55 million headroom on its existing banking facilities which comprise a £65 million sustainability-linked revolving credit facility and a £10 million overdraft facility. Since 30 June, the Group has extended the revolving credit facility to August 2028 on the same terms.

Condensed consolidated statement of changes in equity
for the six months ended 30 June 2025 (unaudited)

for the six months ended 30 June 2024 (unaudited)

for the year ended 31 December 2024 (audited)

Notes to the condensed consolidated financial statements

for the six months ended 30 June 2025

1.   Basis of preparation

These financial statements have been prepared on the basis of the accounting policies expected to be adopted for the year ended 31 December 2025.  These are in accordance with the accounting policies as set out in the Group's consolidated financial statements for the year ended 31 December 2024.

The recognition and measurement requirements of all UK-adopted International Accounting Standards as required to be adopted by AIM listed companies have been applied. AIM listed companies are not required to comply with IAS 34 'Interim Financial Reporting' and accordingly the Company has taken advantage of this exemption.

The financial information in these financial statements does not constitute statutory accounts for the six months ended 30 June 2025 and should be read in conjunction with the Group's consolidated financial statements for the year ended 31 December 2024 which were unqualified and did not contain statements under sections 498(2) and (3) Companies Act 2006.

The condensed consolidated financial statements for the six months to 30 June 2025 have not been audited or reviewed by auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

The condensed consolidated financial statements were approved by the Board of Directors on 29 September 2025.

Going concern

These condensed financial statements have been prepared on the going concern basis, as the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.

As disclosed in the FY24 Annual Report and Accounts, the Directors prepared cash flow forecasts for a period of at least 12 months from the date of approval of those financial statements which indicated that, taking account of reasonably possible downsides and wider macroeconomic conditions on the operations and its financial resources, the Group had sufficient funds to meet its liabilities as they fell due. Actual revenues, profits and cash flows during the 6 months to 30 June 2025 and current financial projections indicate that the Group continues to have sufficient funds to meet its liabilities as they fall due. As such, the Directors believe that it remains appropriate for the Group to continue to adopt the going concern basis in preparing these condensed financial statements.

The Group's balance sheet remains robust and it retains significant headroom on committed banking facilities through to August 2028. The bank facilities available to the Group comprise a £65 million Revolving Credit Facility and a £10 million overdraft facility. At 30 June 2025 the Group had in excess of £55 million of headroom on its banking facilities.

Based on the above, the Directors believe that it remains appropriate for the Group to continue to adopt the going concern basis in preparing these condensed financial statements.

2.   Segmental reporting

Segmental information is presented in respect of the Group's reportable operating segments in line with IFRS 8 'Operating Segments', which requires segmental information to be disclosed on the same basis as it is viewed internally by the Chief Operating Decision Maker.

Reportable segments                    Operations

Extrusion and moulding                Extrusion and marketing of PVC and aluminium window profile systems, PVC cellular roofline and cladding, decking, rigid rainwater and drainage products as well as Wood Plastic Composite ("WPC") and aluminium decking products. Moulding of Glass Reinforced Plastic ("GRP") building components. Re-processing of PVC waste.

Fabrication and distribution         Fabrication, marketing and distribution of windows and doors, cellular roofline, cladding, rainwater, drainage and decking products.

3.   Underlying operating profit

Operating profit is stated after charging/(crediting) the following non-underlying items:

Amortisation of acquired other intangible assets

£0.5 million (HY24: £0.5 million) amortisation of brand and customer contract intangible assets acquired through business combinations.

Share-based payments expense

The share-based payment expense of £0.3 million (HY24 £0.3 million) represents the IFRS 2: Share-based payments charge in respect of the Long-Term Incentive Plan ("LTIP") established in May 2021 for senior management and the Group's Save As You Earn ("SAYE") scheme.

4.   Acquisition

During the period, the Group acquired 50% of the share capital of Home Building Plastics Limited, a plastic distribution business operating three branches, for cash consideration of £1.5 million. An option to acquire the remaining 50% of shares is exercisable from 1 January 2030. Deferred and contingent consideration of £1.6 million has been recognised in respect of this option. Management has concluded that the Group controls Home Building Plastics Limited as the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The following table summarises the consideration paid and the provisional fair values of the assets and liabilities acquired at the acquisition date.

5.   Taxation

The tax charge for the six months to 30 June 2025 is based on the estimated tax rate for the full year.

As at the 30 June 2025 balance sheet date, the corporation tax rate was 25%. The net deferred tax liability has been calculated based on this rate.

6.   Earnings per share (EPS)

7.   Dividends

8.   Net debt

The banking facilities available to the Group are a £65 million sustainability-linked revolving credit facility and £10 million overdraft facility, secured on the assets of the Group. The revolving credit facility had a term through to August 2027 and, since 30 June 2025, the Group has extended this facility to August 2028.

9.   Purchase of own shares

The table below presents a reconciliation of purchase of own shares between the consolidated statement of changes in equity and the consolidated cash flow statement:

During the six months to 30 June 2025, the Group acquired and cancelled 2.6 million ordinary shares in relation to its buyback programme at a total cost of £2.4 million. The remaining 23,603 shares outstanding at 30 June 2025 were repurchased on 1 July 2025, completing the share buyback programme.

10.  Cautionary statement

This document contains certain forward-looking statements with respect of the financial condition, results, operations and businesses of Epwin Group Plc. Whilst these statements are made in good faith based on information available at the time of approval, these statements and forecasts inherently involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause the actual result or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. Nothing in this document should be construed as a profit forecast.

11.  Copies of this half year report

Further copies of this half year report are available from the registered office: Epwin Group Plc, Friars Gate, 1011 Stratford Road, Solihull, B90 4BN or on the Company's website www.epwin.co.uk