Safestyle forecasts bumper trading as lockdown restrictions start to ease

Safestyle UK, the leading retailer and manufacturer of PVCu replacement windows and doors, said its 2021 financial performance should be significantly ahead of market expectations following a strong recovery and a return to profitability in the second half of 2020.

Safestyle has seen demand rocket as homeowners decided to spend their cash on home improvements

The Bradford-based firm has seen demand rocket as homeowners decided to spend their cash on home improvements rather than holidays, eating out, going to the pub or shopping amid the pandemic.

The group reported a progressive increase in revenues in the second half of 2020. The third quarter was 9 per cent ahead of the previous year and the fourth quarter was 20 per cent ahead of the prior year.

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The first lockdown meant operations ceased in the first half of 2020, leading to a £6m loss between March and May.

The group received a £1.8m payment from the Government’s Coronavirus Job Retention Scheme, which partly reduced its first half loss.

It said that 2021 started with an immediate disruption to sales as in-home selling and canvass operations were halted during the latest lockdown. Restrictions have now eased and the group reported a good recovery in sales momentum.

Revenue has grown by double digits in the first quarter of 2021 and levels of profitability have increased.

Safestyle said it has had a good start to 2021 and the first quarter will achieve the highest level of profitability for any quarter since 2017 whilst also maintaining a healthy installation pipeline.

The Government has set out its roadmap for ceasing all restrictions by the end of June 2021 and based on this plan, the board expects there to be no further significant interruption to its operations.

Despite the uncertain operating environment, the firm expects to see good levels of demand for its products and is recapturing the order intake momentum achieved in the second half of 2020 now restrictions on sales activities have been lifted.

Safestyle’s chief executive, Mike Gallacher, said: “We think the business has got growth potential whether the market grows or not. Having said that, the outlook is reasonably positive.

“People have been looking out of their windows and doors for the last year and many people are looking to invest in their homes and we think that will continue.

“We are moving out of that turnaround framework. Obviously we didn’t expect to come straight out of that into a global pandemic. We are now looking to the future and putting that behind us.”

He said there is a strong level of underlying demand for Safestyle’s products and this has been boosted by the lockdown.

“People have been at home more and they are more aware of their surroundings,” he said.

“The first generation of double glazing and doors are now being replaced with improved products.”

He said that Safestyle’s market share is relatively small, despite the fact it is the market leader.

“It’s a very fragmented market,” he said.

“We’ve reported an increase from 8.4 to 9.2 per cent market share in the year. We have gained market share.

“We have taken on more staff. We came out of the first lockdown and recruited across the country and also in Yorkshire, which is great news.

“We took on a couple of hundred people in total. We’ve got around 1,800 people now. It was a good step up in what has been a tough context economically. It’s a positive story.”

He said he was extremely proud of the way that colleagues responded to what was a year with unparalleled challenges, at all times keeping a constant focus on health and safety.

“Having taken decisive action to support the business during the period, we saw a strong recovery in the second half of the year with good order intake growth and a step up in operational capacity, as customer demand remained robust,” he added.

“By the end of 2020, our order book was 83 per cent larger than 2019’s closing position, which has given us a strong platform to maintain momentum at the beginning of the current financial year in spite of the external disruption.

“Notwithstanding the uncertain operating environment, as a result of the strategic and operational progress we have made along with our strong order book, cash position and market leading brand, the board now expects the group’s 2021 financial performance to be significantly ahead of market expectations.

“Our intention remains as before the crisis; to build long term value for shareholders by consolidating our position as the UK’s number 1 choice for replacement windows and doors.”