Epwin Group Plc (AIM: EPWN) (“Epwin” or the “Group”), a leading manufacturer of low maintenance building products, supplying the Repair, Maintenance and Improvement (“RMI”), new build and social housing sectors, provides an update on operations and its response to COVID-19.
· Epwin’s manufacturing and distribution sites have been returning to operation during May
· Funding headroom unchanged at c.£45m
· Market demand returning slowly in line with the sector
· Cautious plan to ramp up operations to match demand levels
As announced on 25 March 2020, Group operations were suspended following the Government announcements of that week in response to COVID-19, as the Group prioritised the health, safety and wellbeing of its employees, customers and suppliers.
Since suspending operations, the Group has sought to maintain a low level of supply where it has been safe to do so for those customers that have continued to operate – a number of whom have been involved in the efforts to establish new COVID-19 test centres or hospital facilities.
After the implementation of enhanced health and safety procedures to follow Government guidelines and continue to safeguard our employees, customers and suppliers, the Group’s main operating sites have been reopening over the past three weeks. All will be back in production by the end of this week, albeit at much reduced levels as activity is matched with demand. The Group will cautiously ramp up production as demand levels recover.
Balance sheet and liquidity
The Group’s balance sheet remains strong. As a consequence of previously announced cost and cash conservation measures, available cash and facility headroom as at 28 May 2020 remains at c.£45 million – unchanged from the level as at 31 March 2020 reported in the Group’s final results announcement of 23 April 2020.
The Group’s banking facilities, which were increased last year, total £75 million. The Board has not sought to increase these bank facilities further nor access other sources of funding, as it believes its available headroom provides sufficient liquidity based on current analysis.
As stated on 23rd April, the impact of COVID-19 will inevitably have a material impact on trading for the current year and it is still too soon to quantify this at this stage. Therefore, in line with other businesses in the sector, all market guidance and forecasts remain withdrawn.
Jon Bednall, CEO of Epwin, commented:
“We are very pleased to have restarted our operations in the last few weeks, ramping up activity to reflect gradually improving demand. Epwin employees have worked tirelessly with customers, suppliers and other stakeholders in order to reach this point. Our balance sheet remains strong and we remain confident in the positive medium-term drivers for the RMI markets that we serve.”