Positive outlook for listed windows and doors business
Safestyle UK, a retailer and manufacturer of PVCu replacement windows and doors, says it has continued to increase its operational capacity and recruit more staff.
In an update on current trading for the year ending 31 December 2020, the Bradford-based firm highlights 9% year on year revenue growth in quarter three and a forecast of about 20% revenue growth for quarter four.
It stresses this revenue growth was achieved despite major supply chain issues attributable to the overall increase in industry demand, reduced third party supply chain inventories and specific global and European supply constraints.
Despite these disruptions, Safestyle says its increase in capacity has enabled the business to deliver its fastest acceleration in revenue growth since flotation in 2013.
It adds: “The Group will enter 2021 with its strongest ever installation pipeline at this stage of the year, providing a solid platform to maintain its current trading momentum whilst at the same time providing some insulation against the potential impact of disruption to future sales activities from further lockdowns.
“The level of installations activity in quarter four is expected to help deliver our strongest financial result for any quarter since 2017.
“The Group has built capacity to deliver double digit revenue growth and has also invested in strengthening the year-end order book.
“Half two revenue is expected to be approximately £71m with an underlying profit before taxation of around £0.5m, materially lowered by the investments made into building our order book and the issues highlighted above.
“Full year revenue is therefore expected to be over £113m with an underlying loss before taxation of approximately £(4.5)m, the loss being fully attributable to the cessation of operations during the first national lockdown in half one.
“Liquidity remains strong with year-end net cash forecast to be approximately £7m, with £3m of the Group’s banking facilities remaining undrawn and a significant level of covenant headroom available.
“The Board is confident the Group’s revenue and profitability momentum in quarter four will carry through into 2021, a performance level that is underpinned by the strength of the order book.
“Consequently, the Board expects 2021 financial performance to be significantly ahead of current expectations.”
Mike Gallacher, CEO, said: “Despite the unprecedented challenges faced by the Group during the year, I am pleased with the recent tangible progress we have made in stepping up our operational capacity and delivering strong revenue growth, whilst further strengthening our order book.
“Moreover, we have also made good progress on our longer-term strategic priorities.
“Notwithstanding the uncertainty associated with the current economic backdrop, the Group is well positioned to build on this positive momentum going into 2021.”
