Bumper sales prompt Sprue Aegis to predict above-expectation results
COVENTRY-based Sprue Aegis, one of Europe’s leading home safety products suppliers, has said its full year results are likely to be ahead of market expectations.
In a trading update ahead of its year-end results, the company said 2014 had been a record year for the business with sales up 36% to £65.6m. Operating profit is up a massive 94% to £10.3m. Both figures are subject to audit.
Sales into France in H2 2014 were particularly strong and Sprue said it continued to see strong demand ahead of the introduction in March of a legal requirement to have at least one working smoke alarm in each domestic property.
However, it tempered the outlook by saying that while the company’s order book had continued to build strongly over the past 12 months and remained at record levels extending into the second half of this year, 2015 sales into France were likely to depend heavily on the “sell through” rate of products which was uncertain at this stage.
Sprue enjoys an estimated footprint of around 50% of French DIY and 75% of French retail space, therefore the business remains well positioned in that market.
It said the significant increase in sales into France had more than offset slightly softer sales in the UK, especially retail and pace sensors. Other sales in the UK to the trade, utilities and leisure, together with Fire & Rescue Services sectors were broadly in line with management expectations.
In line with many other companies, Sprue said currency fluctuations had impacted the business, with the positive impact on gross margin as a result of a change in sales mix being broadly offset by the net adverse impact of Sterling weakening against the Euro and the movement in Sterling against the US Dollar.
Nevertheless, the company said its balance sheet remained strong with £15.9m of cash (2013: £5.2m) and no debt at year-end.
The company said its forward order book was still at an unprecedented level, largely due to demand in H1 2015 in France, and despite currency turmoil, the board remained confident in its outlook for 2015.
Part of the optimism is due to new product launches, a strategy that last month saw the launch of a new range of mains powered smoke and carbon monoxide detectors and accessories designed specifically for the UK Trade sector.
The new range of products branded “SONA” incorporate Sprue’s own Thermoptek, Thermistek and Wi-Safe II technology and sit alongside a refreshed range of BRK trade products which is said to significantly strengthen the company’s product offering in an important sector.
Historically Sprue has had a lower market share in this sector compared with the others in which it operates.
The SONA mains powered smoke alarm is the first alarm in the UK to have a proven carbon footprint and uses just a fraction of the stand-by power of a conventional smoke alarm. Customer feedback to date has been highly encouraging, it added.
