Just one week after our interview with company bosses at windows and doors specialist Safestyle (SFE), the group has issued a profit warning stating that second-half revenues and profits will not meet market expectations. That’s down to “uncertain market conditions and weaker consumer confidence”, thus managers think it prudent to expect “only modest revenue growth” again in the second half of the year. This follows a May warning, as part of the group’s AGM statement, which warned that the first half had been weaker than expected.
Crucially, it seems conditions are worsening across the windows and doors market, with more volatility in trading patterns than previously expected. According to industry regulator FENSA, statistics for the five-month period to the end of May 2017 show market volumes falling more than 10 per cent. Order intakes at Safestyle are actually up by 2 per cent over the course of the first half, suggesting that the company has done well to offset wider market challenges, but it won’t be enough to defend annual forecasts – particularly at the bottom line.
On that note, the group is anticipating a continuation of the current market environment, and going on the defensive. According to chief executive Steve Birmingham the company has already taken “firm action” to reduce operating costs, something that should be made more achievable now that work is complete on the new production facility, which came in on time and within budget. Mr Birmingham was also keen to stress that the company has continued to build its market share despite growing levels of competition.
Analysts at N+1 Singer have reduced their FY2017 and FY2018 pre-tax profit forecasts by 7 per cent to £20m and £21.5m respectively, equating to EPS of 19.7p and 21.3p.
