Safestyle shares remain low as manufacturer confirms 28% drop in pre-tax profits
Bradford-based Safestyle has this morning published its annual results for 2017, which show the manufacturer suffered a 28% drop in pre-tax profits during 2017.
Today’s publication of its full-year results to December 31 2017 comes after a series of profit warnings and severe drops in the firm’s share price, which dipped to an all time low of 89p on Friday; the lowest value since it floated in 2013 and down from a share price of 168p in January 2017. Shares opened at 91p this morning.
Pre-tax profits in 2017 stood at £13.8m, a drop from £19.3m in 2016. Revenue for the period was £158.6m against £159.4m for the same period in 2016; a decline of 0.5%. EBITDA dropped 24% from £20.4m to £15.5m.
This is despite the fact that average unit prices increased by 7.6% in the year from £565 in 2016 to £608 in 2017. Safestyle said: “This follows a price list increase implemented at the start of 2017 to recover additional material costs incurred as a result of sterling weakness. It also reflects a change in product mix with growth in premium products including bi-fold and composite doors, coloured frames and conservatories.”
Safestyle said the volume of frames installed in 2017 was 265,716, a decrease of 7.9% over the previous year when it installed 288,460. The average order value grew by 4.2% from £3,103 in 2016 to £3,232 in 2017.
During 2017, the firm opened a depot in South Wales and completed a new factory extension at Wombwell, South Yorkshire.
In February, Safestyle issued its latest profit warning which saw shares drop to a then all-time low of 111p.
Steve Birmingham, CEO, said: “During 2017 the market became increasingly challenging and although Safestyle again increased market share, the Group’s financial performance was impacted primarily due to increases in lead generation costs, consumer finance subsidy costs and raw materials.
“The start to 2018 has been difficult and as previously announced our order intake has been below management expectations as a result of the continued deteriorating market, declining consumer confidence and increased competitive environment.
“We have already taken action to reduce our cost base and modernise our sales and canvass operations. We expect the major benefits of these efforts to take effect in the second half of 2018.
“2018 will be a year of transition as we continue to invest in operational improvements so that by the end of the year we will have a leaner, fitter and more cost effective business.”
Safestyle said this morning it would continue to invest in a digital transformation project to further reduce costs and increase sales and operational effectiveness.
The company also announced today that after ten years with Safestyle, Mike Robinson will step down as CFO and from the Board during May 2018 to pursue other business opportunities.
The Board will appoint Rob Neale to succeed Mike as CFO. Neale is currently Head of Leisure Travel Finance at Jet2.com and Jet2holidays, divisions of Dart Group. He will join the Group when a departure date from his current employer has been agreed.
Neale’s early career included roles as Commercial Finance Director for Europe, Africa and ANZ for ghd, a designer, manufacturer and supplier of professional hair styling products. He also served as Finance Director for Stanley UK, part of The Stanley Works Inc group, a $4.5bn NYSE-listed company, now called Stanley Black & Decker Inc. He is a Chartered Accountant and started his career at Arthur Anderson.
Steve Halbert, Chairman of Safestyle, said: “On behalf of the Board, I would like to thank Mike for his significant contribution to Safestyle over the past 10 years. He has played a key role in the Company’s development and helped guide the business through its successful IPO in 2013. He leaves with our best wishes for the future.
“We are delighted to welcome Rob to the Company. His appointment follows a thorough process led by the Board and we look forward to him supporting and contributing to the Company’s further development as the UK’s market leader.”
