Window retailer issues profit warning as uncertainty impacts orders
Window retailer Safestyle UK says blamed economic uncertainty for reduced orders in late September and October and said it would significantly impact profits.
The Bradford-based group told the London Stock Exchange in a trading update this morning that orders had picked up to expected levels in November, but that was too late to affect revenues before year end, and the 7.6% fall in October orders would adversely affect its full-year profitability.
In its interim results in September it had predicted full-year underlying profits of at least £1m.
The group’s share price dropped 22% between 8am and 9.30am today – from 30 pence to 24 pence.
“These reduced sales and thus lower installation volumes combined with higher costs of order acquisition incurred until early November, costs of maintaining capacity levels in the short-term and investment in a larger closing order book will adversely impact the group’s gross margin,” the group said in its update.
“As a result, the board expects that the group’s underlying profit before taxation for FY22 will be materially below current market expectations. The board also forecasts that net cash, whilst still remaining healthy, will be lower than expectations at c.£9m at the year-end.
“Looking ahead into 2023, there remains limited visibility on the strength of demand for next year, but the board expects that the market will continue to be sensitive to negative sentiment.”
The pick-up in orders in November – 30% above the same period in November 2021 – meant it would start the new year with a strong order book. The firm said despite the recent volatility the market was traditionally resilient. It would to continue to stress the energy savings of its products in its marketing.
In February the group announced a new TV ad campaign featuring former England goalkeeper David Seaman – its first series of TV adverts in four years.