Russian cyber attack caused frustrations for Safestyle UK after strong performance in 2021

Safestyle UK said it had secured a return to profitability alongside continued progress on its strategic priorities in the last financial year.

Commenting on the results, Mike Gallacher, the company's CEO said: "Despite the continued uncertainty caused by the pandemic as well as the widely-documented supply chain and

inflationary pressures, I am delighted we have been able to deliver our best financial performance since 2017 and make significant progress against our stated strategic objectives.

"The group’s underlying profit before tax for the year represents a £16.4m turnaround from 2018’s underlying losses as we continued to improve margins and deliver growth. The strong performance of the business in 2021 made the cyber attack in January 2022 even more frustrating, however our previous investments in upgrading IT systems proved invaluable in helping to mitigate the worst of its impacts.

"Looking ahead, the group will continue to proactively manage cost-inflation, however we expect consumer confidence to be impacted by the ongoing cost-of-living crisis. Pleasingly, our record-level order book will allow us to smooth the impact of any short term slowing of demand. Notwithstanding the factors above, the board and I remain positive on the outlook for 2022 as the business emerges transformed after four very challenging years and continues its return to our historically strong financial performance and growth.”

Safestyle said the COVID pandemic continued to impact operations in 2021 and "our priority remained the safety of our staff and customers throughout the period".

The statement said: "Managers and staff have shown huge flexibility and resilience as we have maintained our commercial operations.

"Despite the sustained disruption, continued progress was made against our core strategic priorities, including brand development, consumer finance costs, revenue management, compliance and sustainability."

An installation depot was opened in Milton Keynes during the year. Safestyle said this investment improves operational coverage, reduces travelling time and will help drive the productivity of fitting teams.

The order book at the end of the year was 8.4% lower than 2020’s record levels, but remained healthy at more than a third higher than any other year, Safestyle said.

The statement added: "Customer service provision was extremely challenging due to the broad range of disruption experienced, most notably labour availability. Investment in resource resulted in the backlog being cleared by the end of the year."

"Having achieved our objectives set out in the turnaround plan and reporting a strong financial performance in 2021, the business was hit by a cyber attack, originating from Russia, at the end of January 2022.

"Business continuity actions, as well as IT investments in the last two years, mitigated the impact, although it caused a level of operational disruption that took some weeks to fully recover from."

"We have now recovered our systems and processes and the group is trading in line with original plans."

Commenting on outlook, the statement said: "Despite strong progress being made by the group in 2021 to overcome well documented labour shortages, we anticipate resource shortages in critical skilled labour pools will continue in the short to medium term.

"Cost pressures have escalated in the first quarter across raw materials, fuel and labour. We will continue to address these issues through pricing whilst also using our scale advantage to mitigate the impact."

"Demand has remained robust in the first quarter. We successfully launched our new TV campaign in February 2022 which has underpinned our continued order book growth in the first quarter.

"Over the full year, we aim to maintain a balance between order intake and installations capacity to continue to optimise margins.

"Despite the short-term impact of the cyber attack on the financial performance of the business, the group has a strong balance sheet and the board therefore intends to continue to invest behind its strategic initiatives.

"The board expects performance for 2022 to be in line with current expectations with annualised H2 financial performance representing further growth on the good profit delivery of 2021."