Celebrations of a healthy trading update turned out to be short-lived at Safestyle when it followed its upbeat posting with news of a cyber attack that forced it to shut down its systems and delayed responses from its contact centre.

The retailer had reported underlying pre-tax profit ahead of expectations and strong progress, with CEO Mike Gallacher declaring a four-year high, then only two days later – and with no apparent connection – followed with another formal post revealing the recent ‘cyber incident’.

It immediately brought in specialists and took its systems offline while it continues to investigate the nature and extent of the incident and implement its systems recovery plan.

“The Group remains operational,” the report adds, “continuing to sell, survey, manufacture, install and service its customers although some of our contact centre response times are longer than usual.”

All of its payments to staff and suppliers as well as third party transactions from customers continued as normal and the group is now working with police and other authorities, it concludes.

Safestyle’s first posting, of its 2021 trading update, declared:

  • Underlying profit before tax ahead of market expectations 
  • Strong net cash position of c.£12.1m 
  • Effective action to mitigate ongoing cost inflation and supply chain pressures
  • Continued progress against core strategic priorities 
  • Trading during the first weeks of 2022 has remained healthy with order book growing in line with usual Q1 trading pattern

The report continued: “The Group expects to report revenue growth of 26.6% for FY 21 compared to 2020 and 13.6% compared to 2019, delivering Group revenues of c.£143.3m.  2019 provides a more meaningful comparative as a result of the COVID lockdown in the first half of 2020 during which the business generated no revenue for almost two full months.

“Consistent with the Group’s interim results in September 2021, the progress reported on improved margins versus both comparative periods has been sustained for the full year.  However, as a result of the historically low lead generation costs in H1 which normalised to pre-pandemic levels in H2, the full year gross margin, which is still expected to be over 30%, is expected to be lower than the 32.3% reported for the first half of the year.

Notwithstanding the above, the Group expects to report underlying profit before tax ahead of market expectations.

“The Group’s cash position has also significantly increased by £4.5m against the prior year and is now a strong net cash balance of c.£12.1m at 2 Jan 2022.  This balance is after the repayment of £2.4m of the VAT deferral from May 2020.  £3.0m of the Group’s committed banking facilities remain undrawn.”

Mike Gallacher said:  “I am delighted that despite the turbulent context in which we have operated over the last 12 months we have been able to both improve our financial delivery and make strong progress on our strategic priorities.  This has delivered our best financial performance since 2017 whilst also building the foundations for sustainable long-term growth.”

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