Safestyle steps into conservatory new-build amid falling profits
27th March 2018

Safestyle UK is stepping up its offering in the face of me-too newcomer Safeglaze with the announcement that it is moving into new-build conservatories for the first time.

The news, following its 2015 move into refurb/rebuild of conservatories on existing bases Read Story, comes in the company’s Final Results for 2017 along with reports of a 29% profits fall and decreasing revenue, despite a slight growth in market share to 10.7%

Safestyle also announced the imminent departure of another boardroom figure, CFO Mike Robinson, following last week’s news that two other directors had departed – one of them to Safeglaze Read Story. Robinson, leaving after ten years with the company, is to be succeeded by Robert Neale from Jet2 "no later" than July 16.

The company has for some time been reducing its dependency on traditional canvassing methods of lead generation and CEO Steve Birmingham said in the report:

“For the first time, orders generated from our digital activities and direct response channels exceeded those from other sources and accounted for 47% of all business in 2017 compared to 41% in 2016. Our intention is to build on this foundation and continue to invest in our technology and digital activities.

“In 2017, the proportion of orders from door canvass reduced from 45% to 39% of total orders. We plan to improve the cost effectiveness and productivity of both our digital marketing and door canvass operations during 2018 as we aim to reduce our average lead generation costs whilst increasing orders.

 He added: "During 2017 the market became increasingly challenging and although Safestyle again increased market share, the Group's financial performance was impacted primarily due to increases in lead generation costs, consumer finance subsidy costs and raw materials.

The start to 2018 has been difficult and as previously announced our order intake has been below management expectations as a result of the continued deteriorating market, declining consumer confidence and increased competitive environment.

Chairman Steve Halbert reported: “The Group has delivered revenue of £158.6m (2016:£159.4m), down 0.5% from the corresponding period in 2016, and underlying profit before tax of £15.1m, down from last year's £20.5m. Reported profit before tax for the year was £13.8m (2016: £19.3m). Earnings per share decreased 31.1% to 13.1p (2016: 19.0p).

“In a difficult market, which declined by an estimated 9.0% overall, the Group continued to gain market share (as measured by FENSA installation numbers), which was 10.7% at the year end (2016: 10.2%).”

 The Safestyle UK board recommends, subject to approval at the Annual General Meeting on 17 May 2018, a final dividend of 7.5p per share payable on 9 July to ordinary shareholders registered on 15 June 2018. Together with an interim dividend of 3.75p per share which has already been paid, this takes the total proposed ordinary distributions to 11.25p per share, representing reduced cover of circa 1.2 times.

 The report reiterates its Trading Update of last month, saying: “An aggressive new market entrant in an already competitive landscape which has impacted the Group in certain areas of its operations, primarily in relation to our Canvass operations although not exclusively so.”