Retailer sounds alarm bells and prepares for £10m loss
Safestyle has launched deeper cost-cutting measures as it prepares to makes a £10m loss this year after a downturn in the market.
The Bradford-based company makes and sells PVCu replacement windows and doors for homes.
It had reported a profit in the first half of the year, helped by reduced costs, but it is now preparing for a very poor performance in its “most important trading period of the year”.
Customer orders usually rise significantly between mid-August and early December as homeowners respond to the changing weather.
Orders are currently down 11% year-on-year and other indicators, such as online search activity, are down markedly – despite industry statistics showing Safestyle has gained market share. The company blamed a combination of macroeconomic factors and the “hottest early September on record” for the fall in sales.
Safestyle’s board is now forecasting an underlying loss of £9.5m-£10.5m and annual revenues to drop to between £140m-£142m.
It has brought in a range of cost-cutting measures, including reduced shifts in its factory, and voluntary pay and fee waivers for the board.
It expects its net debt to be between £5.5m-£6.5m at the end of the year, and the company currently has debt facilities of £7.5m in place.
Safestyle said it “intends to engage with stakeholders to strengthen the balance sheet” in order to support its recovery.
In a statement to the stock market, Safestyle said: “The board maintains the growth recovery prospects are strong and clear data highlighting the UK’s ageing housing stock in need of repair underpins this.”