Generally speaking, the majority of UK glazing companies that are listed on a stock exchange have performed pretty well over the past 12-24 months. The likes of Safestyle UK have done very well, whether you like their sales methods or not. Saint Gobain have had a solid year too, as have many other glazing industry group and companies who are listed on stock exchanges.

However, there is one rather glaring exception to this rule, and that is a company called Entu. They are a company consisting of ten brands, but their core business is energy saving windows and doors, French doors and the LivinRoof solid roof from Ultraframe. They also deal with boilers and other home energy efficiency measures, but it’s windows and doors that form a big part of their organisation.

Their share price has tumbled from a mid-2015 high of 132.84 to just 19.75 at the close of trading today. That’s a drop of just over 85%, and in the space of just over a little over a year, that’s a very dramatic, and concerning drop in value.

Steep drops

A quick look on Bloomberg tells you the story in one chart:


When I look at this chart, it’s very similar to the charts for Lehman Brothers before it went bust, and Deutsche Bank right now. Both banks lost a ton of their share value, with the former infamously becoming the catalyst for a global financial meltdown. Thankfully Entu is not a bank. But such a steep drop in the value of it’s shares should cause concern for investors and the board alike.

A dig through their media function on their website indicates that the company has been undergoing a period of restructuring and streamlining to bring revenues, profits and dividends back in line. They have also recently “offloaded”, otherwise known as sold, one of their non-core businesses for £200k.

Yet, despite the efforts to transform Entu, the share price has continued to slide. Is this a sign that investors and owners of shares don’t have confidence in the changes being made?

DGB Features

The company structure

Entu is a web of companies and brands, and this is how they explain their structure on their corporate website:

Credit: entu plc

Credit: entu plc

That’s a lot of brands. There’s a clear fenestration focus in a lot of those. And perhaps the one that jumps out the most is Zenith. Unfortunately, for the wrong reasons. Earlier on in October, a video posted on Facebook went viral when the son of an elderly home owner confronted a Zenith salesman after selling two doors to said elderly home owners for just under £6000. It brought on a barrage of criticism from the general public, and shed a negative light on the industry and Zenith itself. It is not yet known what damage, if any, the video has done. But it will have made uncomfortable watching for Zenith and Entu alike.

Putting Zenith issues to one side, the above structure is a very layered, quite complicated one. Turning an organisation round this size, structured in this way, isn’t easy. It may take some more time before the group sees some stability and a return to share price value.

There is though one more immediate scenario that could play out.

A potential acquisition target

At the current share price of sub-20, this makes the Entu Group a pretty attractive acquisition target. With companies like Zenith, A Job Worth Doing, Europlas and St Helens Glass, the group has good market exposure to both the installation and manufacturing part of the market.

Entu will be an attractive purchase to companies looking for ready made access to both the installation and manufacturing parts of the UK fenestration market, as well as the wider energy efficient home improvement market.

But who would be interested in such a group? A large, established UK fenestration company could show some interest. Ultraframe already has exposure to the company via their LivinROOF, and would have the financial clout to purchase the group. However, the amount of restructuring left to complete is large, and it probably isn’t a task they would want to take on right now. New glazing industry super-groups like DW3 and the expanding Polyframe group could be bold enough to try, but a purchase like this would take them in a very different direction, so it would be highly unlikely.

Chances are that outside industry investors could take some interest. Attempts could be made to steer the company and it’s share price back north, in the hopes of fairly decent medium term returns. The road ahead though will be tricky. Brexit shockwaves are still being felt, and it’s unknown how the largest glazing groups in the UK are going to be able to adapt to changing market conditions.

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