Earnings season continues in the UK fenestration market, with Safestyle UK posting their interim results for the first quarter of this year. This is the statement provided by the company:
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”):
Trading update
Our trading has remained in line with expectations, supported by our largest TV campaign since 2017, with an updated brand identity and communications platform. We believe that this campaign has helped mitigate the impact of declining consumer confidence and general economic uncertainty.
Despite a cyber attack which affected us severely during Q1, order intake has remained robust, growing by 16.3% to the end of April. Our order book at the end of April, at 26% higher than last year, will continue to support strong revenue levels through the summer.
Revenue for the first four months of the year was 6.7% ahead of last year, with March and April delivering over 10% growth reflecting the recovery from operational disruption caused by the cyber attack in January.
As previously communicated, the cyber-attack will impact H1 financial performance primarily through disruption to customer service and a delay to a planned material price increase. The price increase has now been implemented and the business will continue to respond quickly to any future increase in costs. Concurrently, we are putting a commensurate focus on our internal productivity and overheads.
Strategic priorities
The business has continued to progress its strategic agenda as outlined in our preliminary results announcement and Annual Report.
· New TV campaign: our new TV campaign aired between February and April, leveraging our consumer insight work and utilising David Seaman, OBE, as our new brand ambassador. The communication platform of ‘Great Saves with Safestyle’ has performed well, driving increased sales and improved brand awareness.
· Safestyle Academy: faced with widespread skill shortages we initiated a significant investment in training new installers. The programme has been heavily oversubscribed since launch and is now full.
· Levelling up depots and sales branch performance: our new depot training programme will launch in the coming weeks, supporting our new Standard Operating Procedures which will unlock the benefits of best practice across our network.
· Sustainability: having delivered our 2024 CO2 targets by the end of 2021, representing a 19.1% reduction since 2020, we are now driving incremental improvements and have reset our targets for a further 6% reduction for 2025. We intend to complete a Scope 3 audit of our 10 largest suppliers by the end of the year.
Outlook
The Board acknowledges the current wider economic uncertainty, but remains of the view that our strong marketing plans and value proposition offers resilience against a possible decline in demand. We will continue to anticipate and act early on costs and pricing while also focusing on controlling our overheads and driving productivity.
Guidance for the full year remains unchanged with the financial impact of the cyber attack confined to H1. Despite the challenging context, our H2 financial performance is forecast to follow the improving trajectory achieved in FY 2021.
Capital Markets Day and Notice of Interim Results
Having successfully navigated a number of years of turbulence, the Board has communicated its intent to outline the Group’s strategic roadmap for the medium term. To ensure we can communicate this to as wide a group as possible, this will take the form of a Capital Markets Day presentation on 7 September 2022. Further details will be published nearer the event.
The Group will report its interim results for the six months ending 3 July 2022 on Thursday 22 September 2022.
Good and not so good
Safestyle has shown good growth in the first four months of this year, with their order book being 26% higher than this time last year. They say they have been able to recover from a cyber attack they suffered in January and post overall growth of 10% for the period to the end of April.
They have also been able to fill their training academy places, with the business saying that their programme is now full. As I have long talked about, our industry needs to be much more proactive in actually tackling the skills shortage, rather than just talking. It will be good to see this scheme expand and perhaps other companies follow suit.
There are signs of challenges, and I have to say that I think this statement plays down the issues ahead. They have said that because of the cyber attack they have not been able to implement their planned price increases. With the cyber attack now out of the way, the business should then be moving to implement said price increase. Like it has with everyone else, you would imagine this would have some sort of effect on Safestyle.
They have said that despite the wider economic uncertainty, they see H2 performance going on as planned. They say their high-value proposition will see them through this sticky period. That is rather blaze and doesn’t really acknowledge the scale of the problems coming. With the cost of living and inflation out of control and only going to get worse, big-ticket items like new windows and doors are going to be purchases that are going to be harder to justify when priorities turn to paying for gas, electricity, food and fuel. No amount of David Seaman on TV will keep Safestyle immune from the slowdown that is already in motion.
Speaking of which, I have seen the new Safestyle adverts on TV. They’re not going to win an Oscar, but they’re a hell of a lot better than the shouty man flopping windows over!
View the original article here: https://otp.investis.com/clients/uk/safestyle/rns/regulatory-story.aspx?newsid=1592012&cid=656
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