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Safestyle warns on profits amid slow margin recovery

Thu, 16th May 2019 09:40

(Sharecast News) - AIM-listed windows and doors retailer Safestyle warned on Thursday that full-year profit will be below current market expectations as margins have been slower to recover, while costs also weigh.In an update on current trading ahead of its annual general meeting, the company said the second phase of its turnaround plan is now well underway as it looks to recover volumes and market share, restore its operational effectiveness, reduce costs and improve margins.The company expects to grow revenue by around 10% versus the first half of 2018, accelerating towards 20% in the second of this year. It said while some elements of consumer demand appear soft, the market has seen 2.7% volume growth in the first four months of the year "and against this backdrop it is pleasing to see that we have grown at more than twice that rate".Meanwhile, the first-half margin performance is expected to have improved by around 4.5% compared to 2H 2018, with the momentum set to continue for the rest of the year.Safestyle said its cost base has grown significantly but the group is addressing this "robustly" and expects to deliver a material improvement in its operating margin versus 2018 based on actions already taken this year.Nevertheless, margin improvement has been slower than expected due to higher lead generation costs and the pace of recovery in improving operational effectiveness. As a result, it now expects turnover to remain broadly in line with current market expectations and continues to forecast a small profit for the full year, although this will fall short of current market expectations.Safestyle said also it continues to expect its net cash position to increase compared to last year's closing level of £0.3m.Liberum downgraded its profit expectations on the back of the update."Although it is disappointing to downgrade profit before tax expectations for 2019E from £4.5m to £0.7m, we note that this estimate still anticipates a £9.1m profit swing from 2018 to 2019," the broker said."The shares still trade at only 4.6x peak earnings, demonstrating significant upside in recovery. We remain confident that a significant recovery in profits will come through in 2020E and 2021E and the shares look cheap on multiples of these years, for example we see the price-to-earnings ratio dropping from 12x to under 9x and a high free cash flow yield in those years too."At 0955 BST, the shares were down 14% at 79.20p.Last September, Bradford-based Safestyle settled its claims against rival SafeGlaze, which agreed to change its name and rebrand fully.Safestyle had accused NIAMAC developments, trading as SafeGlaze, of trade mark infringement, passing off, misuse of confidential information, malicious falsehood and various other matters.
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UK shareholder meetings calendar - next 7 days

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Friday 5 January 
MTI Wireless Edge LtdEGM re proposed grant of options to the directors
Monday 8 January 
Plus500 LtdEGM re director election
Velocys PLCCourt Meeting and GM re recommended cash acquisition by Madison Bidco Ltd
Tuesday 9 January 
Agriterra LtdAGM
DX Group PLCGM re acquisition by HIG Capital funds
GENinCode PLCGM re fundraise
Leeds Group PLCGM re sale of subsidiary Hemmers-Itex
Smart Metering Systems PLCGM re acquisition by KKR funds
Wednesday 10 January 
Hummingbird Resources PLCGM re share placement
Ironveld PLCAGM
Reabold Resources PLCGM re appointment of new directors
Safestyle UK PLCEGM re approve winding up of company
Scirocco Energy PLCGM re proposed disposal of interests in Energy Acquisitions Group Ltd
Versarien PLCGM re capital reorganisation
  
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18 Dec 2023 11:43

IN BRIEF: Safestyle UK calls January 10 meeting to approve winding up

Safestyle UK PLC - Bradford, England-based retailer and manufacturer of PVCu replacement windows and doors - Calls extraordinary general meeting for January 10 to approve the winding up of the company and the appointment of Mark Russell Kelly and Louis Leonard Gerber of KPMG and David Standish of Interpath Advisory as joint liquidators. Also says Zeus Capital Ltd has resigned as Safestyle's nominated advisor and joint broker and Liberum Capital Ltd as its other joint broker. A nomad and a broker are requirements for a listing on the AIM market in London. Safestyle shares remain suspended from trading.

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3 Nov 2023 09:43

IN BRIEF: Safestyle UK now a "cash shell", expects liquidation soon

Safestyle UK PLC - Bradford, England-based retailer and manufacturer of PVCu replacement windows and doors - Becomes AIM Rule 15 cash shell, having ceased to control and/or conduct substantially all business assets and activities upon appointment of administrators to subsidiaries HPAS Ltd, Style Group Holdings Ltd, and Style Group UK Ltd on Monday. Says directors will most likely be required to place company into liquidation in due course. Company is required to make an acquisition or acquisitions via reverse takeover, or seek to become an investment company, within six months from October 30 to lift share suspension. Safestyle is not currently pursuing such transactions. Expects admission to trading of its shares on AIM to therefore be cancelled once liquidators have been appointed.

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3 Nov 2023 08:41

Safestyle 'likely' to enter liquidation

(Sharecast News) - Door and window fitting company Safestyle said on Friday that its directors would likely be required to place the group into liquidation.

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30 Oct 2023 19:16

TRADING UPDATES: Digital 9 dismisses call for strategic review

(Alliance News) - The following is a round-up of updates by London-listed companies, issued on Monday and not separately reported by Alliance News:

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30 Oct 2023 15:56

TRADING UPDATES: Bezant optimistic after Hope & Gorob estimate

(Alliance News) - The following is a round-up of earnings and trading updates by London-listed companies, issued on Friday and not separately reported by Alliance News:

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27 Oct 2023 11:14

Safestyle stock suspended, says return of shareholder value "unlikely"

(Alliance News) - Shares in troubled Safestyle UK PLC were suspended from trading on Friday and the company warned shareholders will be wiped out even if a sale of the company occurs.

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27 Oct 2023 07:54

SafeStyle suspended from trading as uncertainty grows

(Sharecast News) - Replacement window and door specialist SafeStyle UK confirmed the suspension of its shares from trading on Friday in an update on its efforts to secure its future.

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26 Oct 2023 17:00

LONDON MARKET CLOSE: Stocks firmly in red on ECB's Lagarde comments

(Alliance News) - Stock prices in London closed down on Thursday as investors reacted negatively to the European Central Bank's warning that it would be "totally premature" to discuss interest rate cuts.

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26 Oct 2023 14:16

Safestyle UK shares plummet amid financing woes

(Alliance News) - Safestyle UK PLC shares crashed on Thursday, after it said it does not expect to receive a capital injection or new financing.

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26 Oct 2023 12:08

LONDON MARKET MIDDAY: Stocks down ahead of US data and ECB decision

(Alliance News) - Stock prices in London were lower at midday Thursday, ahead of key data from the US, and a European Central Bank interest rate decision.

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26 Oct 2023 10:35

AIM WINNERS & LOSERS: Argentex plummets on CEO's sudden departure

(Alliance News) - The following stocks are the leading risers and fallers on AIM in London on Thursday.

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26 Oct 2023 09:08

LONDON MARKET OPEN: StanChart falls on China hit; WPP cuts outlook

(Alliance News) - Stock prices in London were off to a shaky start on Thursday morning, as investors nervously look ahead to a key interest rate decision from the European Central Bank, as well as the US economic growth data.

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26 Oct 2023 08:20

Safestyle tumbles as hopes for capital injection, new financing fade

(Sharecast News) - Windows and doors retailer Safestyle warned on Thursday that it no longer expects to be in receipt of any form of capital injection or new financing, sending its shares sharply lower.

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10 Oct 2023 19:22

Safestyle attracts interest as considers restructuring options

(Alliance News) - Safestyle UK PLC on Tuesday said it was considering a number of options which could include the sale of some subsidiary businesses.

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