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Safestyle UK PLC shares plunged on Tuesday despite the firm achieving profit expectations in the last two months, after it failed to meet its latest order intake forecasts.
Safestyle shares were down 43% at 4.73 pence on Tuesday afternoon in London.
The UK-focused retailer and manufacturer, of PVCu replacement windows and doors for the homeowners, said its order intake ‘went according to plan’ in early August. In mid-August through early September, however, it ‘[fell] behind our internal forecasts’ and by Tuesday was down around 11% compared with last year.
‘It is management’s belief that following a wet summer, the unseasonally warm weather at the end of August into the hottest early September on record is compounding the macroeconomic factors that influence current market demand levels,’ Safestyle commented.
Safestyle currently expects revenue for 2023 to be between £140 million and £142 million, with an underlying loss between £9.5 million and £10.5 million. Revenue for 2022 was up 7.7% to £154.3 million, with a pretax loss of £8.5 million.
The company reported an industry-wide fall in volumes, with the market performing at around 24% below levels in July and August last year.
Safestyle said management has taken steps to mitigate the impact of weakened demand, including reduced shifts for factory employees and inviting voluntary pay and fee waivers from board members. However, it acknowledged that its current measures were ‘not sufficient to fully mitigate the adverse impact of current demand and thus, volume levels in the short-term.’
Safestyle now anticipates demand for the year to be below previously expected levels, despite believing that it will somewhat ‘pick up’ in line with seasonal trends.
However, Safestyle said its growth recovery prospects remain strong, with ‘the UK’s ageing housing stock in need of repair’ presenting ‘compelling’ opportunities for the firm to achieve its medium-term targets once the market recovers.
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