Have any of us ever lived through a week like that? I would say not. As each day passes, the number of cases and deaths in the UK and around the world from COVID-19 accelerates. As each day passes further restrictions on daily life are put in place as our Government desperately tries to prevent the NHS from crumbling. As each day passes, the damage to the economy being done due to the extraordinary sacrifices we’re being asked to undertake grows exponentially.

Yet, among the unprocessable levels of information and catastrophic news, some regular business activities continue, even if they are heavily doctered by the ongoing health crisis. This week Safestyle UK announced their full 2019 annual results and new 2020 guidance, if anyone can actually give any sort of guidance worthy of the word right now.

2019 tainted by COVID-19

Had we not been dealing with a global pandemic, the results posted by the company would be a stunning turnaround. These are the numbers you need to know:

Look at those numbers. All huge positive swings. A clear indication that the recovery plan is, or rather was, right on track. Imagine what the board and management were thinking at the start of 2020. Brexit phase 1 done, a full year until we’d have to worry about a trade deal with the EU being done. A resounding General Election result ending years of political turmoil. Finally the path forward was clear and things looked much calmer. Then came COVID-19, and threw the entire planet into a crisis no one alive has ever experienced. It makes Brexit look like a minor stomach irritation.

You can read the entire release in detail here, but I will pick out the key sections of the report for you below:

·    Group restored to profitability in the middle of the year with strong progress made on phase two of the Turnaround Plan (see CEO’s Statement), which is now complete and which has achieved improvements in revenues and gross margin alongside reduced overheads.

·    The year end order book increased by 24% above 2018’s closing position through accelerated order intake in November and December driven by intentionally increased lead generation investment, which has held back the 2019 profit outcome.

·    Volume of frames installed increased by 3.3% to 190,252 (2018: 184,184).

·    Average unit sales price up 5.0% to £678 (2018: £646).

·    Improvement in market share (as measured by FENSA) to 8.5% (2018: 7.8%).

·    Business transformation has also accelerated, improving further in customer service, safety, compliance and internal management processes.


·    The Group has had a strong start to 2020, with both sales and profit ahead of the last year and the business well positioned for delivery of our forecast.

·    However, the COVID-19 pandemic is creating significant uncertainty across the UK and international economy.

·    The business has responded to the situation rapidly and is equipped to deal with the probable short-term adverse impact because of its improved net cash position, underpinned by a committed facility to October 2021 alongside a leaner cost base.

·    To preserve cash, the previously announced c.£3m marketing investment has been now deferred.

·    The Board is now focused on the wellbeing of staff, protecting the business and providing the best service possible in the current context.

·    The overall effect of the current uncertainty on the Group is, at the current time, difficult to quantify.  For this reason, the audit opinion will contain an emphasis of matter in respect of going concern as a result of COVID-19, although the audit opinion will remain unqualified.  Notwithstanding these concerns, the Directors confirm that, after due consideration, they have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and have continued to adopt the going concern basis in preparing the financial statements.

Mike Gallacher, CEO said:

The results for 2019 announced today show good progress in our turnaround plan.  The business has started strongly in 2020 but is now facing into the challenges posed by the COVID-19 pandemic.

We are responding rapidly with the twin aims of protecting our people and customers, while providing the best service possible through the crisis.  Our contingency planning was conducted early and our responses are being executed with huge support from our staff and agents.

Our results show that during 2019 the business restored profitability and closed the year with a healthy order book and having laid strong foundations for continued performance improvement and sustainable growth.  Our intent remains to build the business for the long-term benefit of shareholders with our trusted value brand whilst consolidating our position as the UK’s No 1 choice for Windows and Doors.

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Uncertainty hits again

Although in their statement they expect to see some more progress being made in 2021, the reality is that any guidance given by the company, or indeed any business in fenestration right now is utterly pointless as the situation around the global pandemic literally changes every hour, and the measures being implemented by Government are upending life in the UK as we know it.

The Chancellor on Friday unveiled a historic raft of packages designed to help individuals and businesses deal with the economic disaster unfolding as a result of the actions we’re all being asked to take. I will cover in more detail those measures in a post soon to be published on DGB. But in short, whilst the majority of those measures are to be very much welcomed, it won’t alleviate the enormous levels of fear and uncertainty in the general public right now. As we all continue to fear for our jobs and our health, how many home owners will continue to put new windows and doors at the top of their list of priorities whilst in isolation at home? Time will tell in the coming weeks and months.

Due to the health crisis, the price of Safestyle shares have fallen through the floor to all-time lows:

Credit: Bloomberg

As I said in a previous post, this horrific fall in the share price has nothing to do with the company. Other publicly traded fenestration companies have all suffered the same dramatic falls in their price. Its simply a case of traders looking at the sectors home owner are most likely to cut back on in an emergency and recession, and unfortunately fenestration is on that radar.

The efforts to turn the company around and post figures as they have done in 2019 are to be commended. It was a truly difficult task and one that I would say was almost complete. Now, there is a new problem. One that affects every single person, company and country. It will be how we all pull together that will determine the very future for so many companies in our industry.

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