20th Sep 2018 09:28
LONDON (Alliance News) - Plastic-framed windows and doors maker Safestyle UK PLC axed its interim dividend Thursday after sinking to a loss on a sharp fall in revenue, though it remained optimistic as trading conditions steadily improved.
For the six months ended June, the firm sank to a pretax loss of GBP5.7 million from a GBP8.8 million profit a year prior. This was after revenue dropped to GBP60.5 million from GBP82.5 million a year before.
Safestyle axed its interim dividend, after paying a 3.75 pence per share one a year prior.
"The results announced today reflect an unprecedented set of circumstances faced in the first half of the year that created a number of significant challenges for the business," Safestyle Chief Executive Officer Mike Gallacher said. "The litigation we initiated against an aggressive new market entrant has now concluded in an out of court settlement; as a result we expect some recovery in the trading position of the company in the second half."
The firm explained that there has been a "steady improvement" in its daily order intake during the year to date. It now stands 12% higher in September than it did at the beginning of July.
"However, this improvement in order intake through July to September has not flowed into revenue in the quarter as the improvement came too late to affect installation volumes," Gallacher added. "This has resulted in a weaker third quarter performance."
Despite this, as the firm prepares to close its third quarter the opening order book is expected to be "higher than originally forecast." As a result, the firm expects to generate a modest operating profit in the fourth quarter.
All told, however, Safestyle expects an underlying pretax loss for 2018 of around GBP6.5 million.
In 2017, Safestyle generated a GBP13.8 million pretax profit on revenue of GBP158.6 million.
Shares in Safestyle were 3.2% higher at 41.70 pence on Thursday.
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