31st Mar 2014 13:55
LONDON (Alliance News) - Windows and doors maker Safestyle UK PLC Monday reported strong revenue growth in 2013 as its gained market share, improved margins and the number of orders and instillations picked up, however the retailer said its pretax profit for the year was flat due to listing costs from its recent admission to AIM.
The manufacturer and retailer - which listed on AIM in December last year - reported a 13% increase in revenues for the year ended December 31, 2013, to GBP124.8 million, up from GBP110.2 million in 2012.
Its pretax profit for the year was flat at GBP9.5 million, due to admission costs to AIM and the settlement of a historic tax planning scheme with HMRC of GBP3.1 million, said the firm.
Excluding costs relating to admission fees and a historic tax settlement, the group reported a pretax profit of GBP15.0 million, a 58% increase on the GBP9.5 million reported a year earlier.
The group, which said it has adopted a progressive dividend policy, proposed a dividend of 5.5 pence per share for the year, and gave a confident outlook for the business in the year ahead, as the general economy and the home improvement market continue to recover. It said that order intake in the first two months of the current financial year has been strong and that it ended the year with GBP5.2 million in cash.
"Order intake was up 10% over the January and February period, but that probably isn't going to be a representative of the whole year, as we front-end load all of our marketing spend into the first quarter," Chief Executive Steve Birmingham told Alliance News after the company's results were released.
Safestyle UK said that manufacturing increased during the year, with 250,185 frames produced, up 7.5% from 232,687 in 2012, whilst the number of home installations increased by 9.4% to 55,112, comprising over 250,000 glazed window and door frames. It said average unit sales price also increased by 5.5% to GBP496, up from GBP470 the prior year.
The maker of uPVC windows is one of the biggest in the market, and has continued to increase its market share, despite the market shrinking since the start of the financial crisis in 2007. The group said that during the year it increased its market share to 7.85%, up from 7.49% a year earlier.
The tried and tested marketing route for Safestyle UK, of door step canvassing followed by a telephone call resulting in a sales visit, has begun to change, as the internet offers a differentiated way to generate leads.
"We are seeing is a dramatic movement away from our traditional methods of generating those leads, to more internet leads. The vast majority of growth over the last few years has come from that new lead source," said Birmingham.
The group said that leads generated from media and online marketing in 2013 grew by 17% to 47,660.
"This increased penetration is a reflection of Safestyle UK's focus on its core products, its integrated sales and low cost manufacturing approach and its continued geographic expansion," said Birmingham.
The group said that it has seen strong demand across the UK, although it has continued to expand into the south and south east of England, where is has generated a strong number of sales in recent years, and felt it was still under-represented in some of its key areas.
"We've just opened two new sales offices, one of which is in Croydon. We had had a presence in the South and South East for about 10 years now, but this is just to supplement and fill in some geographical gaps that we had seen," said Birmingham.
The Group purchased the freehold of its head office in Bradford and manufacturing facility in South Yorkshire during the year. It said the cost of this investment was GBP4.0 million, and accounted for the majority of the GBP5.1 million spent of capital expenditure during the year. The group said its underlying capital expenditure is around GBP1.5 million a year.
"We would expect capital expenditure to be around GBP1.5 million and GBP2 million per year, which will be mainly spent on the manufacturing facility. As a growing business, we have to grow capacity, and one of the cheaper ways to do that, is to put more efficient equipment into the manufacturing process," said Birmingham.
Safestyle UK shares rose 7.7% Monday afternoon, trading at 195.00 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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