Good progress on turnaround for Safestyle, as losses reduce by 12.5m – Bradford Telegraph and Argus

BRADFORD'S Safestyle UK cut its pre-tax losses by almost 80 per cent in 2019 as the second phase of its turnaround plan took hold.

But the PVCu windows and doors firm has warned that despite a strong start for 2020, the coronavirus outbreak is creating uncertainty in the industry and analysts believe this could delay the company's final phase of accelerated growth.

A three-phase turnaround plan was implemented after the company made a 16.3m loss before tax in 2018, as revenue fell by more than 40m.

The latest full year results show a 3.8m loss before tax, a change of 12.5m, and an increase in revenue of 8.4 per cent, taking the Manningham headquartered company's revenue to 126.2m.

The firm said it had "restored to profitability in the middle of the year with strong progress made on phase two of the turnaround plan", resulting in improvements in revenues and gross margin alongside reduced overheads.

It added that the year end order book had increased by 24 per cent above 2018's position, down to an "accelerated order intake" in November and December.

In addition the volume of frames installed in 2019 increased by 3.3 per cent to 190,252 and the average unit sales price was up by 5.0 per cent.

Furthermore the company's market share increased to 8.5 per cent, up from 7.8 per cent in 2018.

CEO Mike Gallacher said: The results for 2019 announced today show good progress in our turnaround plan. The business has started strongly in 2020 but is now facing into the challenges posed by the COVID-19 pandemic.

"We are responding rapidly with the twin aims of protecting our people and customers, while providing the best service possible through the crisis. Our contingency planning was conducted early and our responses are being executed with huge support from our staff and agents.

"Our results show that during 2019 the business restored profitability and closed the year with a healthy order book and having laid strong foundations for continued performance improvement and sustainable growth. Our intent remains to build the business for the long-term benefit of shareholders with our trusted value brand whilst consolidating our position as the UKs No 1 choice for Windows and Doors.

In terms of outlook, the firm said while it has had a strong start to 2020, the coronavirus pandemic is "creating significant uncertainty" in the economy.

The businesses has responded to the situation rapidly, it said, and is able to deal with any short-term adverse impact. But in order to preserve cash, a 3m marketing investment has now been deferred.

"The Board is now focused on the wellbeing of staff, protecting the business and providing the best service possible in the current context," it added.

"Notwithstanding these concerns, the directors confirm that, after due consideration, they have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and have continued to adopt the going concern basis in preparing the financial statements."

Read the rest here:

Good progress on turnaround for Safestyle, as losses reduce by 12.5m - Bradford Telegraph and Argus