LONDON (Alliance News) - Safestyle UK PLC said Thursday that margin improvement has been slower than expected and the company now forecasts profit for the full year to be below current market expectations.
Safestyle shares were down 15% at 78.50 pence.
The windows and doors manufacturer said that it continued to rebuild its order book during the first four months of the year. The board expects revenue to grow by around 10% versus the first half of 2018, accelerating towards 20% in the second half of 2019.
"While elements of consumer demand do appear to be soft, the market (as measured by FENSA) has seen volume growth in the first four months of the year of 2.7% and against this backdrop it is pleasing to see that we have grown at more than twice that rate," Safestyle commented.
The board also expects its first half gross margin performance to have improved by around 4.5% versus second half of 2018. This momentum is expected to continue through the remainder of the year, Safestyle said.
Despite the progress, "higher lead generation costs and the pace of recovery in improving operational effectiveness" has resulted in slower margin improvement than expected. This is expected to produce an annual profit below current market forecasts.
Meanwhile, turnover is expected to remain broadly in line with market expectations.
In a separate statement, the company said that nearly 20% of shareholders at its annual general meeting voted against the directors' remuneration report.
