A rise in volumes is always an encouraging sign, but replacement window and door specialist Safestyle (SFE) managed this in a shrinking market. The company installed almost 6 per cent more frames to 149,742 in the first half to 30 June even though the market contracted by 2.2 per cent according to data from industry monitor Fensa. This, alongside its increased market share to just more than 10 per cent, led to a healthy bump up in sales.
Gross margins were down 40 basis points to 33.7 per cent but this was caused by the reclassification of digital activity, the costs of which had previously been considered a marketing expense. Seeing as it actually generates business leads, it is now booked as a cost against sales. Chief executive Steve Birmingham said margins should increase again in short order because the cost of a lead generated digitally is cheaper than via door-to-door or telephone sales.
The group just paid out £11.2m in dividends, including a special payout, meaning net cash is actually around £12.4m. Mr Birmingham said he would "not rule out" another special dividend but he would likely see through the ongoing factory extension in Yorkshire before handing further excess cash out.
Analysts at N+1 Singer expect adjusted pre-tax profit of £20.5m for the year to December 2016 leading to EPS of 20.2p compared with £18m and 17.7p in 2015.
| SAFESTYLE (SFE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 271p | MARKET VALUE: | £224m | |
| TOUCH: | 270-274p | 12-MONTH HIGH: | 288p | LOW: 204p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 42p* | NET CASH: | £23.6m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 74.0 | 8.8 | 9.1 | 3.4 |
| 2016 | 83.5 | 9.5 | 9.4 | 3.8 |
| % change | +13 | +9 | +3 | +10 |
Ex-div: 29 Sep Payment: 31 Oct *Includes intangible assets of £21m, or 25.6p a share | ||||
