Investment case 8 Jul 2014 01:07
No one is under cutting safestyle, not on the markets any way, as they are the only double galcing comany that is listed. They have no competion, they are the only ones.
The only reason the SP is drifting is due to lack of volume. There is to be a trading update this month, which hopefully will be good and put a spark under the SP and drive it north
The below pargraph taken from Investors Chronicle
Boasting a 7.85 per cent market share of the replacement window market, and having undertaken installed 250,000 frames last year, the company is the largest retailer and make of uPVC windows and doors for the UK homeowner replacement market. It has also been growing strongly, having increased its market share for nine consecutive years.
Moreover, with volumes up seven per cent last year and average unit prices 5.5 per cent ahead, this fuelled a 13 per cent increase in full-year revenues to £125m, or £2823 per order. Part of the reason for this outperformance of rivals is down to the fact that the company is the lowest cost national retailer and maker of uPVC windows and doors, so has a cost advantage over smaller firms. It also has the advantage of being able to target market its audience in a more focused and cost efficient way given its greater scale.
Sensibly Safestyle has also been expanding into the affluent south and south east market which has been benefiting the most from the property boom and the ongoing UK economic recovery. The strategy is clearly working as margins remain robust and with volumes and prices on the rise, analysts expect another year of double digit profit growth. Post results, Toby Thorington at Edison upgraded his current year EPS estimates by 9 per cent and ratcheted up his 2015 numbers by a hefty 17 per cent. On this basis, expect current year EPS of 15.7p, rising to 17.4p in 2015. Furthermore, with the benefit of a cash-rich balance sheet and robust cash generation, the 5.5p a share final payout (ex-dividend of 18 June), is forecast to rise to 8.7p in 2014 and 9.7p in 2015