Safestyle UK PLC Full Year Trading Update and Notice of Results (9326A)
January 27 2020 - 2:00AM
UK Regulatory
TIDMSFE
RNS Number : 9326A
Safestyle UK PLC
27 January 2020
27 January 2020
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
Safestyle UK plc
("Safestyle" or the "Group")
Full Year Trading Update & Notice of Results
Safestyle UK plc (AIM: SFE), the leading retailer and
manufacturer of PVCu replacement windows and doors to the UK
homeowner market, today issues a trading update in advance of its
preliminary results announcement for the year ended 31 December
2019 ("FY19") on 19 March 2020.
Trading Update
Since the Group's interim results announcement on 19 September
2019, management is pleased to report continued progress with its
Turnaround Plan albeit against a backdrop of weak consumer
confidence and challenging market conditions in the second half of
the year.
Turnover for FY19 is expected to be c.GBP126 million, with the
second half of 2019 delivering c.10.7% higher revenue than for the
same period in the prior year.
The Group has delivered a solid recovery in market share from
7.0% at the end of 2018 to 8.4% in Q3 2019. Sales performance
accelerated in November and December, driving additional lead
generation costs in Q4 while strengthening the year-end order book,
which increased by 24% versus 2018's closing position. As a result
of this investment the Board now expects an underlying loss before
tax for FY19 of up to GBP1.5m.
The Board can also report that the Group delivered monthly
profits across most of H2 and achieved an improvement in its
overall net cash position, increasing to GBP0.4m at 31 December
2019.
The Board is also pleased to announce that it has extended its
existing borrowing facility with Aurelius Finance Company to
October 2021. This facility provides considerable liquidity for the
Group as it moves into phase three of the Turnaround Plan.
Group Outlook
The Group has made good progress on reaching the milestones
outlined in phase two of its Turnaround Plan; recovering volumes
and market share, restoring operational effectiveness, reducing
costs and enhancing margins.
As the business moves into phase three of this plan in 2020, the
focus is on maintaining the Group's strong momentum, whilst
continuing to put in place the foundations for sustainable, long
term growth and UK market leadership which will include the
following key initiatives:
-- Invest significantly in modernising the Safestyle brand and
communicating its compelling value proposition both on and offline,
primarily through TV advertising. This follows two years of
restricted investment and aims to increase brand awareness and
drive further growth in the Group's market share position.
-- Continue to establish robust systems, training and processes
to underpin the future growth of the business; and finally
-- Continue to embed the considerable progress made on
regulatory compliance, health and safety and customer service -
reflecting the changing operating environment and consumer
expectations.
The Group will invest c.GBP3m in 2020 in order to deliver these
initiatives. Whilst this is expected to have a negative impact on
short-term profitability, the Board believes that the substantial
uplift in media spend alongside selective investment to continue
transforming key areas of the business will deliver material
benefit to Safestyle from 2021 onwards.
Although the Board remains cautious in light of the broader
market environment, it believes that this increased investment to
deliver future growth will ensure that the Group is well placed to
continue to improve its market share position and take advantage of
a longer-term recovery in the market.
Mike Gallacher, CEO of Safestyle UK, commented:
"The new Executive team has been in place for 12 months and I am
pleased with the pace at which we have stabilised the business,
reduced costs, embedded regulatory compliance and enhanced our
operational effectiveness. However, there remains a lot to do as we
move into the final phase of our Turnaround Plan. Recently and
concurrent with our internal challenges, there have been huge
regulatory changes in the industry, whilst consumer buying
behaviour and customer service expectations have evolved. As the UK
market leader, with the right investment in 2020, we believe we are
ideally placed to benefit from these trends and I am determined to
further establish the foundations needed to deliver sustainable
profit growth and long-term success for Safestyle."
Enquiries:
Safestyle UK plc via FTI Consulting
Mike Gallacher, Chief Executive Officer
Rob Neale, Chief Financial Officer
Zeus Capital (Nominated Adviser & Joint Tel: 0203 829 5000
Broker)
Dan Bate / Daniel Harris / Dominic King
Liberum Capital Limited (Joint Broker) Tel: 0203 100 2100
Neil Patel / Jamie Richards
FTI Consulting (Financial PR) Tel: 0203 727 1000
Alex Beagley / James Styles / Sam Macpherson
About Safestyle UK plc
The Group is the leading retailer and manufacturer of PVCu
replacement windows and doors to the UK homeowner market. For more
information please visit www.safestyleukplc.co.uk or
www.safestyle-windows.co.uk.
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END
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