A bumper year for cash generation at double glazing expert Safestyle (SFE) resulted in surplus funds that are being channelled into shareholders pockets by means of a generous final dividend. Last year, frame installation volumes grew 7 per cent, despite a contraction in the wider industry, as Safestyle increased its market share. Sales in the South East, where the group is actively expanding, climbed 17 per cent, while average order values were up nearly 4 per cent to £2,806. The upshot was a 10 per cent increase in underlying pre-tax profit to £16.8m.
Leads generated by digital sources - including TV as well as the website - grew to nearly a third of the total, up from a quarter last year. That's good news as this is a higher-margin channel than the traditional door-to-door method, where growth is "pretty stagnant", according to chief executive Steve Birmingham.
Encouragingly, a 1.6 per cent price increase from 1 January 2015 to offset higher glass prices and compulsory insurance-backed guarantees hasn't dampened demand: sales so far this year are running slightly ahead. Macroeconomic and policy trends are favourable, too, not least the forthcoming liberalisation of pension rules, which could put cash in pensioners' pockets. Safestyle is soft-launching a conservatory window replacement service from April, following customer demand.
Zeus Capital expects adjusted pre-tax profit of £17.4m and EPS of 18p this year, up from £16.5m and 17p.
| SAFESTYLE (SFE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 183p | MARKET VALUE: | £142m | |
| TOUCH: | 182-185p | 12-MONTH HIGH: | 216p | LOW:141p |
| DIVIDEND YIELD: | 5.1% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 36p* | NET CASH: | £8.2m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 95 | 7.9 | 6.8 | nil |
| 2011 | 99 | 7.0 | 6.8 | nil |
| 2012 | 110 | 9.5 | 9.1 | nil |
| 2013 | 125 | 9.5 | 8.3 | 5.5 |
| 2014 | 136 | 16.4 | 16.5 | 9.3 |
| % change | +9 | +73 | +99 | +69 |
Ex-div: 18 Jun Payment: 13 Jul *Includes intangible assets of £21.7m, or 28p a share | ||||
