After an installation boom in the 1980s, the first generation of double-glazed PVC windows and doors are reaching the point where they need to be replaced. Add to that a recovery in consumer confidence, and a buoyant housing market, and Safestyle's (SFE) management is confident about the company's prospects.
The purveyor of PVCu windows and doors - which only floated in December - enjoyed an 8 per cent rise in the volume of frames installed in the first-half. That's not bad given the 4 per cent growth seen in the wider market. Leads from television and online grew 12 per cent to 27,762, while those generated from door-to-door salesmen fell. This change in consumer shopping habits is good news for Safestyle as internet and telephone sales offer better profit margins.
The biggest area of growth was the England's south east, where sales grew a fifth. Chief executive Steve Birmingham told us there was "more to be had" here and that Safestyle would focus on expanding into the region. The business is strongly cash generative, too, and the group's cash pile grew £5.6m, enabling Safestyle to support a decent dividend payout. Meanwhile, the order book for the second half looks strong and, while the market is expected to slow marginally, Mr Birmingham expects Safestyle to outperform.
Broker N+1 Singer expects full-year pre-tax profit of £16.8m, giving EPS of 15.3p (from 13.6p in 2013).
| SAFESTYLE (SFE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 177p | MARKET VALUE: | £138m | |
| TOUCH: | 175-178p | 12-MONTH HIGH: | 217p | LOW: 130p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 31p* | NET CASH: | £10.8m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 62.7 | 7.8 | 7.7 | nil |
| 2014 | 69.2 | 8.6 | 8.5 | 3.1 |
| % change | +11 | +10 | +10 | - |
Ex-div: 1 Oct Payment: 3 Nov *Includes intangible assets of £21.6m, or 28p a share | ||||
