19th Sep 2019 11:31
(Alliance News) - Windows maker and retailer Safestyle UK PLC on Thursday warned that its full-year revenue will fall below expectations despite growing in the first half of 2019.
In the six months to June 30, Safestyle posted a 6.4% year-on-year revenue rise to GBP64.4 million from GBP60.5 million, largely driven by an increase in average frame price, the company explained.
Safestyle also narrowed its interim pretax loss to GBP2.5 million from GBP5.7 million, helped by operating expenses being reduced by 9.1% to GBP18.4 million from GBP20.2 million.
Underlying pretax loss, not including restructuring costs and one-off expenses, narrowed to GBP1.6 million from GBP2.2 million.
Restructuring costs such as redundancy payments rose 37% to GBP571,000 from GBP417,000 as Safestyle is attempting to reduce the cost structure of the company. However there was a non-repeat of GBP1.1 million in costs related to a court claim the company made against NIAMAC Developments Ltd and a fine imposed by UK health and safety regulators for an incident in 2017.
Average price per frame installed rose 8.6% to GBP669 from GBP616 in the first half of 2018, but this was slightly offset by a reduction of installations, down 0.5% to 98,966 from 99,491.
Like last year, the company will not pay an interim dividend.
Safestyle reported that the second phase of its restructuring plan, which aims to return the company to profitability, progressed during the interim period. The firm added that it was profitable in the second quarter, though warned on its performance for the remainder of 2019.
"To ensure the group maintains its current momentum through the end of the year into 2020, the board is anticipating an increase in the levels of investment required in lead generation versus those previously projected. The board also expects revenue to be marginally below previous expectations, although still expects double-digit growth in the second half versus the prior year alongside continued gains in market share," it said.
"Consequently, the board now expects a small underlying pretax loss of GBP500,000 for the full year. Looking further ahead, the board remains confident that these actions will give the group the best possible base from which to accelerate its revenue, margin and profit growth in 2020 as part of phase three of the turnaround plan. The board therefore remains comfortable with market expectations for 2020."
Shares in Safestyle were 0.2% higher at 56.20 pence each in London on Thursday morning.
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