Trading Update and Directorate Change

RNS Number : 7034L

Safestyle UK PLC

23 April 2018

 

23 April 2018

Safestyle UK plc

("Safestyle" or the "Group")

Trading Update & Directorate Change

Safestyle UK plc, the leading retailer and manufacturer of PVCu replacement windows and doors to the UK homeowner market, today issues an update on current trading.

In its Final Results announcement on 22 March 2018 the Group noted that the beginning of the year had been difficult with a continuing deterioration in the market resulting from declining consumer confidence. This was exacerbated by the activities of an aggressive new market entrant and it was noted that this competitor's actions were impacting the Group in certain areas of its operations, particularly in relation to its Sales and Canvass divisions. As a result, the Group's order intake in 2018 to date had been weak and its market share was under pressure. 

The Board reports that, since then, the activities of this competitor have intensified and the Group has taken longer to rebuild its order intake to the rate previously anticipated and has also experienced cost increases as management takes the necessary actions to address these challenges.

The Board believes it is necessary to take a cautious approach to the prospect of further short-term disruption to the Group's operations. Therefore, the Board now expects Group revenues and underlying profit before tax for the year ending 31 December 2018 to be significantly below current market expectations with profits for the year expected to be heavily weighted to the second half.

The Board remains resolutely focused on protecting Safestyle's leading market position.  Early evidence shows that the Group's Sales and Canvass teams are more effective in those locations where rebuilding has occurred. As an immediate priority, the Board is undertaking a detailed strategic review of its operations and has a number of measures in hand aimed at addressing the competitive situation and improving performance.

The Group announced in its Final Results that it was proposing a final dividend of 7.5p per share, subject to the approval of shareholders at the Annual General Meeting to be held on 17 May 2018. As a result of the revised guidance and in order to provide the Company with the strongest balance sheet from which to protect and strengthen its position, the Board believes the most responsible course of action is to preserve the Group's cash by cancelling the recommended final dividend of 7.5p per share that was due to be paid on 9 July to ordinary shareholders registered on 15 June 2018.

The Group also announces that Steve Halbert, Non-Executive Chairman, has resigned from the Board with immediate effect. Peter Richardson, an existing Non-Executive Director at Safestyle and a member of the Audit, Remuneration and Nominations Committees, has been appointed Non-Executive Chairman with immediate effect. 

Peter joined the Safestyle Board in July 2016 and has extensive Board level and Non-Executive Directorship experience across a number of sectors including technology and engineering, fast moving consumer goods (FMCG) and utilities. He was a Group Board Director and Chief Operating Officer at Dyson Ltd for almost 15 years, during which time the business grew from a revenue base of £40 million to more than £1 billion. Peter's early career was spent in the sales and marketing functions of Cadbury Schweppes, Coca-Cola and Colgate Palmolive.

Peter Richardson, Non-Executive Chairman, said:

"On behalf of the Board, I would like to acknowledge the significant contribution Steve has made to the Group. He was the Group's Chairman at the time of its successful IPO in 2013 and has provided wise counsel, guidance and support to the Board over the years. We wish him the very best for the future.

"I am now looking forward to working with the Board and the executive team during what is a challenging period for the Group as it undertakes a number of actions to emerge as a stronger, fitter, more agile business."

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.

Enquiries:

Safestyle UK plc Steve Birmingham, Chief Executive Officer Mike Robinson, Chief Financial Officer	via FTI Consulting
Zeus Capital (Nominated Adviser & Joint Broker) Nick How / Dominic King	Tel: [phone]
Liberum Capital Limited (Joint Broker) Neil Patel / Jamie Richards	Tel: [phone]
FTI Consulting (Financial PR) Alex Beagley / James Styles	Tel: [phone]

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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