Trading and Operations Update & Notice of Results

RNS Number : 0556G

Safestyle UK PLC

22 July 2021

 

22 July 2021

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 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.  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")

Trading and Operations Update, Upgraded FY21 Expectations & 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 and operations update for the six months ended 4 July 2021 ("H1").

Mike Gallacher, CEO of Safestyle, commented:

"The Group has traded strongly through H1 and continued to make good progress on its strategic agenda, including levelling up the performance of our national sales and installations network, transforming our customer experience and driving our sustainability agenda.  This strategic progress has been made despite the continued operational challenges created by the Pandemic and the associated market volatility experienced in the first half of 2021.

Despite these current uncertainties, in light of our positive H1 revenue growth, margin improvement and current order book, the Board expects 2021's full year financial performance to be ahead of current market expectations." 

H1 Financial Headlines

The Group expects to report H1 revenues of c.£72.9m, an increase of 13.1% over 2019 and 73.1% over 2020.  Given the first COVID lockdown in H1 2020 during which the business generated no revenue for almost two full months, H1 2019 represents a more meaningful comparative for H1 2021.

As reported in the AGM statement in May, the Group has made good progress on improving its margins which have increased versus both comparative periods.  This continued improvement in margin performance is after the impact of cost inflation in resin, other materials and resource-related costs which have been widely reported in our sector.

Net Cash was c.£14.4m at 4 July, with £3.0m of the Group's committed banking facilities remaining undrawn as reported in our Final Results on 25 March 2021.  The VAT deferral reported at the end of the year has reduced to £1.7m at the end of H1 and will be fully repaid by the beginning of January 2022.  With this exception, working capital is being controlled normally and the Group is now generating sustained positive net cash inflows.

Trading and Operational Update

As expected, the key national milestones reopening the economy have slowed consumer demand in our sector and this is reflected in our recent order intake following a very strong first quarter.  As a result, the Group has utilised some of the record order book that had been built since May 2020.  Notwithstanding this, the order book at the end of June 2021 remains very healthy at c.10% ahead of June 2020 levels.

The business continued to invest in recovering customer service performance during H1 following the significant operational issues that have impacted the business from the COVID lockdowns in 2020 and 2021 .  This work is closely aligned with our strategic priority of driving growth through enhancing the quality and consistency of our customer experience.

Outlook

Looking ahead, the Group remains exposed to two short term uncertainties.  Firstly, the market remains volatile, although demand now appears to be returning to more normal levels as consumer spending opportunities broaden.  The extent to which this will be mitigated by the current record levels of household savings and the impact of the recent surge in home transactions is uncertain.

Secondly, we are currently experiencing an elevated level of operational disruption due to employees being required to self-isolate as a result of the country's increasing levels of COVID infection rates and related self-isolations of close contacts.  This is already having an impact on the business and looks likely to adversely impact our customers' availability, our factory and our supply chains if not rapidly addressed by the Government.  The senior management team are managing the situation closely with the aim of sustaining stable operations utilising our COVID-safe practices that have been embedded in the business since early 2020.

Despite these current uncertainties, in light of the positive revenue, margins and current order book, the Board expects 2021's full year financial performance to be ahead of current market expectations.  

Notice of Results

The Group will report its half year results for the six months ended 4 July 2021 on 23 September 2021.

Enquiries:

Safestyle UK plc Mike Gallacher, Chief Executive Officer Rob Neale, Chief Financial Officer	via FTI Consulting
Zeus Capital (Nominated Adviser & Joint Broker) Dan Bate / Daniel Harris / Dominic King	Tel: [phone]
Liberum Capital Limited (Joint Broker) Neil Patel / Jamie Richards	Tel: [phone]
FTI Consulting (Financial PR) Alex Beagley / James Styles / Sam Macpherson	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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