Safestyle issues profit warning as it prepares for annual losses of up to £8.6m

Bradford-headquartered Safestyle expects its full year pre-tax losses to amount to between £8.2m and £8.6m – a widening of around £2m since its last trading update. 

The retailer and manufacturer of UPVC replacement windows and doors, this morning issued a trading update. Safestyle said there had been a timing difference between incurring higher costs and installations taking place and because of that, the Board now expected that for the year ending 31 December 2018, the Group would deliver underlying pre-tax losses of between £8.2m and £8.6m. 

In September, the Group said it expected to report underlying pre-tax losses for the full year in the region of £6.5m.

It has been a troubled year for Safestyle, as it battled with a rival firm trading as Safeglaze over alleged trade mark infringement, passing off, misuse of confidential information, malicious falsehood and various other matters; as well as weaker consumer confidence. In October, Safestyle announced a settlement of its claims against NIAMAC – which traded as Safeglaze. 

This morning, Safestyle said that since the Commercial Agreement was announced, the Group had “experienced a significant increase in its contracted workforce across its canvass, sales, surveying and installations operations.  This has resulted in an improved sales order intake that is in line with the same six week period last year.”

The firm added: “Linked to this growth in workforce that was previously not forecast, the Group has invested more than budgeted in lead generation, commissions and associated overheads.  Whilst management anticipates that turnover for the last month of the year will be ahead of that previously forecast, the majority of the benefit of this recruitment and the return on this increased investment will only occur in 2019.”

Safestyle added that that recruitment activity and associated investment in growth and “notwithstanding the fact that management’s three phase turnaround plan is in its early stages against a backdrop of weaker consumer confidence”, the Board was confident that the recovery and performance in 2019 would be ahead of current market expectations.

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