Safestyle UK records 'strong rebound' in orders as lockdown eases

The group said order intake for the eight weeks from 25 May was 23.2 per cent ahead of the same period last year.

In a trading update for the six months ended June 30 2020, Safestyle said it was profitable in January, February and June. The order book carried into the second half of the financial year is 45 per cent higher than at the same point last year.

The company said a major shift in consumer spending from travel and leisure to home improvements has driven the increased demand.

The company's board said it was encouraged by the restart performance while recognising that confidence and consumer demand remain uncertain.

Safestyle restarted operations in mid-May with a phased return to work which allowed the smooth implementation of COVID safe policies, a balancing of work in progress and a good level of collaboration with suppliers, the group said.

The statement added: "Every function in the business was impacted by our new COVID safe practices, with a particular focus placed on ensuring safe in-home operations. The consumer response was supportive and flexible with existing customers keen to have their windows and doors fitted, reassured by the practices we had adopted.

"On restart it became clear that consumer demand was ahead of our expectations. The strength of this demand combined with the speed of our return to full operations delivered excellent initial order intake, with growth of 23.2 per cent versus 2019 for the eight week period from 25 May.

The statement added: "In this context the group has been focused on scaling up capacity to meet the increased demand. As a result, initial installation revenues were only marginally ahead for the same eight week period of the prior year. Progress on capacity has been made and hence the last three weeks delivered a 16.9 per cent growth in installation revenue."

Commenting on outlook, the board said it was encouraged by the performance of the business following the restart of operations.

But it added: "However, it is not yet clear whether the recent performance is sustainable in an environment where confidence and consumer demand remain uncertain."

"Faced with this uncertainty, the board will continue to closely monitor the group’s performance and market fundamentals in the months ahead with the intention of providing guidance for the full year as soon as it is credible to do so."

Mike Gallacher, CEO of Safestyle UK, commented: “Prior to the lockdown on March 23 the business was ahead of our internal budget and making good progress on its strategic priorities.

"The lockdown was managed smoothly with a small skeleton staff maintaining our order book, providing emergency customer support and running a trial remote digital sales team.

"During April we were pleased to receive strong support from our shareholders in a £8.5m placing of new shares which significantly strengthened our balance sheet and provided additional liquidity which proved helpful as we restarted the business.

“The board took an early decision to accelerate the group’s return to full operations in response to the strong consumer demand experienced in May and early June.

"Our cash position supported our ability to trade proactively and we have undoubtedly benefited from a slower competitor response since the lockdown lifted.

"Our view is that the combination of deferred lockdown demand and a major shift in consumer spend from travel and leisure to home improvement have driven the increased demand we have experienced.

“Despite very good levels of current consumer demand the medium term economic outlook remains uncertain. We will therefore maintain a balanced approach, seeking to grow the business while keeping our costs controlled and net cash position positive.”

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