Safestyle plans TV push but profit
warning adds to shares fall
4th February 2020

Safestyle shares dropped to 50p today after shedding over a third in value since a mid-January peak of 77p, with a mixed trading update last week adding to the decline.

Shareholders heard that a £3million investment in 2020 towards delivering the third phase of its recovery plan, including a ‘substantial uplift in media spend’ primarily through TV advertising, would have a negative impact on short-term profitability thought it says this could expect to deliver material benefits from 2021 onwards. Underlying FY19 pre-tax loss is expected to be up to £1.5million.

Among the good news in the report, Safestyle says it has now recovered a good proportion of the self-employed agents it had lost to now-defunct rival Safeglaze.

Turnover for 2019 is expected to be around £126million. Market share recovered from 7% to 8.4% from the end of 2018 to Q3 2019 and its year-end order book grew 24% over the end of 2018.

CEO Mike Gallacher concluded:  "The new Executive team has been in place for 12 months and I am pleased with the pace at which we have stabilised the business, reduced costs, embedded regulatory compliance and enhanced our operational effectiveness.  However, there remains a lot to do as we move into the final phase of our Turnaround Plan.

“Recently and concurrent with our internal challenges, there have been huge regulatory changes in the industry, whilst consumer buying behaviour and customer service expectations have evolved.  As the UK market leader, with the right investment in 2020, we believe we are ideally placed to benefit from these trends and I am determined to further establish the foundations needed to deliver sustainable profit growth and long-term success for Safestyle."