Safestyle UK plc (LON: SFE), the leading retailer and manufacturer of PVCu replacement windows and doors to the UK homeowner market, has today issued a trading update for the six months ended 30 June 2019, in advance of its half year results announcement scheduled for 19 September 2019.
Since the Group’s AGM Statement on 16 May 2019, management has continued to make progress on Phase Two of its Turnaround Plan which is focused on recovering volumes and market share, restoring operational effectiveness, reducing costs and enhancing margins. As expected, the first half of the year will result in a small loss, but despite a challenging market where consumer demand appears soft, the Group remains on track to deliver a small profit for the full year which is in line with current market expectations.
In the first half of the year, the Group continued to rebuild its order book and as a result, revenues for the period will be c.£64.4m, 6.4% higher than H1 2018 with May and June being c.15% higher than the same months in 2018.
FENSA installation statistics for the first half indicate that the market has declined in volume by 8.2% versus H1 2018. Against this disappointing market performance, we have grown market share; by 16.5% versus H1 2018 and by 19.5% versus H2 2018.
The Group continues to improve its margins and operational KPIs versus the prior year and has delivered good progress during H1. During 2018, the cost base of the business had grown and a broad range of actions have now been taken to significantly recover our earlier, more competitive cost base. The benefits from these actions are expected to have a fuller impact on the Group’s financial results during H2 and the Board forecasts a significant reduction in overheads versus 2018.
Cash remains a key priority for management and the Board continues to forecast that full year net cash will increase versus FY 2018’s closing positive level of £0.3m.
Mike Gallacher, CEO of Safestyle UK, commented:
“The first half of 2019 has seen significant progress delivered against Phase Two of our Turnaround Plan and we continue to focus on accelerating the Company’s operational recovery, controlling costs and improving margins. This work has been enabled by enhanced financial transparency and performance metrics as a result of our 2018 digital project.
“Our focus in H2 will be to continue to establish the foundations for sustained growth in 2020 as we move into Phase Three of our Plan.”