Safestyle warns on profit but says recovery plan on track
21st May 2019

Safestyle UK has warned that full-year profit is set to fall below current market expectations but adds that its three-phase recovery plan following last year’s court battle with me-too rival Safeglaze UK is on track.

Chairman Alan Lovell said in a pre-AGM statement this week that Phase 2 – to recover volumes and market share – was now well underway. The business had continued to rebuild its order book and the board expected it to grow its revenue by around 10% against H1 2018. He continued: “The cost base of the business has grown significantly. Management are addressing this robustly and it is expected that the Group will deliver a material improvement in its operating margin versus 2018 based on actions already taken this year.”

But he added that lead generation costs and the group’s recovery in operational effectiveness meant margin improvement had been slower than expected. “Consequently, whilst the Board does expect turnover to remain broadly in line with current market expectations and continues to forecast a small profit for the full year, it does expect this profit to be below current market expectations.”

He concluded: “The Board also continues to forecast that the Group's net cash position will increase versus 2018's closing positive level (£0.3m) as a result of effective management control on capital expenditure levels and working capital management.

“The board remains focussed on delivery of the three stage Turnaround Plan and is cautiously optimistic about achieving a strong exit rate this year to set the Group up for a further step-up in its profit delivery in 2020."

Earlier this year, the group reported a £16.3million loss and a £40million drop in revenue after a year of court battles with the disruptive newcomer backed by former Safestyle founder Mitu Misra, with the losses including £7.5million, largely accounted for by court costs. read story