Safestyle UK this morning has issued a statement after their AGM. It is as follows:

Alan Lovell, Chairman of Safestyle UK plc, the leading UK focused retailer and manufacturer of PVCu replacement windows and doors for the homeowner market, will make the following statement at today’s Annual General Meeting (“AGM”):

Lockdown Period Update

Since the end of March, in line with our commitment to the health and safety of our people and guidance published by the Government in relation to the UK’s response to the COVID-19 outbreak, all of the Company’s locations across the country have remained temporarily closed and all survey and installation activities paused.

Throughout this lockdown period, the Company has furloughed the majority of its workforce and has benefitted from the Government’s Coronavirus Job Retention Scheme in covering the majority of the ongoing staff costs associated with retaining its workforce.  The Company has kept a limited number of employees working to maintain telephone contact with customers and provide them with emergency service support alongside regular updates on the status of their orders. 

Immediately following the temporary cessation of our operations in March, the Company successfully raised £8.5 million in a share placing and obtained a covenant waiver on its existing borrowing facilities for the duration of the lockdown period from its lenders.  Together with the initiatives undertaken to preserve cash, these actions have strengthened the Group’s balance sheet and resulted in available liquidity in excess of £12m at the date of the AGM.

Restarting Operations

In light of the Government’s updated guidelines, the Group’s senior management are now planning a restart of our commercial operations.  The plan is based on a phased and measured return to work for the business and involves a number of temporary changes to our policies and practices to ensure staff and customer safety. As a business, we are confident in our ability to operate in line with the COVID-19 Secure guidelines, as soon as it is permissible to do so.

With the necessary health and safety measures in place, the Company is currently expecting to restart operations, including manufacturing, installations, surveying and selling activities by the end of May.  Staff working in the Company’s various support functions will also begin to return to work in line with this phased restart, although the Company will continue to ensure people who are able to work from home do so. 

Clearly there are high levels of uncertainty around consumer demand for the year ahead, the challenges of selling in home and the competitive environment.  The Company will seek to adjust to this operating context rapidly.  It will continue to utilise the Coronavirus Job Retention Scheme as required through the summer, whilst maintaining tight controls on the Group’s cost base and closely monitoring available liquidity.

Looking Forward

It remains impossible to provide financial guidance for the year ending 31 December 2020 in the current environment pending further certainty of the impact of the COVID-19 pandemic on consumer confidence and any negative impact on established ways of working.  As and when we are able to provide further information we will do so.

Whilst the short-term outlook remains uncertain, the Board has considered various scenarios as part of plans to re-start operations safely in response to customer demand and continues to target progress made in the Group’s Turnaround Plan.  Moreover, the business is more resilient with a leaner fixed cost base and considerable liquidity to underpin its ability to navigate through the challenges presented by the pandemic and return to its plans as quickly as possible.

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Adapting

The company has pulled its guidance for the rest of the year, citing massive uncertainty. Across the business world companies are doing the same. Its simply impossible to provide any kind of guidance when even the outlook for tomorrow is difficult to predict.

This paragraph though is the most telling for me:

Clearly there are high levels of uncertainty around consumer demand for the year ahead, the challenges of selling in home and the competitive environment.  The Company will seek to adjust to this operating context rapidly.  It will continue to utilise the Coronavirus Job Retention Scheme as required through the summer, whilst maintaining tight controls on the Group’s cost base and closely monitoring available liquidity.

The company knows that the way it trades is going to have to change. Door canvassing is off the table. Even if it were possible, the current public mood would make that method of sales very hard to justify. So too would long sits in people’s homes and selling on the night after protracted negotiations. That entire business model is now defunct and it sounds as though the company knows it.

They will have to move rapidly to a brand new business model. One that is heavily digitised and can be operated remotely. If reps are going to sit in homes, they’re going to need plenty of PPE and they’re going to have to adapt to a quicker, less aggressive form of sales as homeowners are simply not going to be receptive to such a sales method anymore.

The business has cash. About £12m. What this does is it gives them time and resources to make the necessary changes to the business. All businesses which are based on the door canvassing/long homeowner sits is really going to have to change their approach and quickly if they are to ensure they don’t get left behind as others who have seen what the future of our industry looks like are already moving on.

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