City briefs: Safestyle and Animalcare Group

Safestyle, a Bradford-based retailer and manufacturer of PVCu replacement windows and doors, expects to report H1 revenue of £74m, a decline of 5.4% on H1 2022, in a trading and operations update for the six months ended 2 July 2023.

The business explains a combination of inflation, which has continued to remain higher than economist forecasters expected, and higher interest rates, have put even greater pressure on customers’ disposable incomes, weakened consumer confidence and increased the cost of providing its own finance products. 

In response to the difficult market conditions, the company’s Board says it initiated Safestyle’s largest efficiency and cost reduction programme for many years which, the firm says “included a small number of redundancies” at all levels of the business. 

These actions equated to a £2m annualised saving from levels at the start of 2023.

The company’s update adds: “Although these actions have not been enough to fully counter the volume and margin impact of the trading environment, the Board remains focused on delivering monthly run rate profitability in a challenging market which was achieved at the end of H1. 

“In line with our forecasts, the group expects to report an underlying loss before taxation for H1 2023 of  around £(6.0)m.

“The challenging market conditions have worsened over the last five weeks into July and have adversely impacted order intake volumes which the Board forecasts will be an ongoing trend to the extent the group’s full year performance is now expected to be materially below current market expectations. 

“The Board continues to forecast an underlying profit before taxation for H2, now expected to be c.£0.5m. The net cash position at the end of the year is still expected to be positive.”

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Jenny Winter

York-headquartered animal health business, Animalcare Group, has reported report strong gross margins and improved cash generation in the first half of 2023 in its unaudited trading update for this period.

The group says it expects revenues of about £36.7m for H1 2023 (H1 2022: £38.3m).

However, its Board remains confident the group will deliver revenue in line with market expectations for the full year and demonstrate revenue growth compared to 2022.

Jenny Winter, chief executive officer, said: ”Animalcare made positive progress on margins and cash conversion, despite some moderation in demand during the first half, and we continue to expect revenue growth for the full year.

“Looking further ahead, we remain confident in the prospects of the group and the long-term fundamentals of the animal health sector and continue to employ our strong financial position to invest in drivers of growth.”

Animalcare says cash conversion rate improved markedly to about 50% leading to a further reduction in net debt to around £4m as of 30 June 2023 (31 December 2022: £5.4m).