Safestyle shares rebound despite weak outlook

Shares of Bradford-based window and door company Safestyle UK rebounded about 10% on Thursday after it said its revenue rose 1.4% to £82.5 million for the six months ended June 30 despite an “increasingly challenging market” and it announced a share buy-back programme of up to £2.5 million.

On September 8, Safestyle’s shares fell about 35% after it gave a bleak outlook for 2017.

On Thursday, Safestyle said underlying profit before tax fell 15.1% to £9 million for the half year.

“The first half of 2017 was an increasingly challenging market, however Safestyle increased revenue and market share albeit at a higher cost than historically,” said Safestyle CEO Steve Birmingham.

“As a result, we have experienced a decline in profits in what was the severest contraction of our market since 2008/09.

“So far in H2 we have maintained our order intake in line with the previous year and have already commenced a number of initiatives to reduce our cost base.

“The group’s cash conversion and balance sheet remain strong and the board is confident of outperforming the market and gaining market share based on our differentiators of price competitiveness, promotional finance offers, quality energy efficient products and outstanding manufacturing capability.”

In his outlook, Safestyle chairman Robert Halbert said: “Our expectation is that the market will continue to be weak for at least the remainder of 2017.

“Consumer confidence has declined, and our outlook is therefore cautious.

“We expect to continue to gain market share in H2, although sales will continue to be expensive to win and we expect operating margins to be challenging.

“While market conditions remain at the current low level we will continue to challenge our cost base for efficiencies, though the impact of cost elimination will primarily benefit 2018 and beyond.

“We are determined that Safestyle will deliver out performance in its market and gain market share, based on our geographic spread, product range and commercial offerings.”