Safestyle opens the window to sales in South

The Bradford-based PVC window and door maker decided to branch out into the South on the assumption that it may hit capacity in the North and the Midlands.

Sales in the South showed good growth of around six per cent in the year to December 31, but the group was surprised by a very strong showing in the North and the Midlands.

Steve Birmingham, CEO of Safestyle UK, said: “The Midlands and the North grew by 13 per cent, which was better than we expected. We thought we might have hit a ceiling in the North and Midlands so we were pleasantly surprised.

“We put a new suite of adverts out there and that’s broadened the appeal.”

He added that sales have been boosted by rising property prices as people see more value in home improvements. In addition consumer confidence has increased and people have more disposable income. It has also introduced more affordable finance packages.

Safestyle said underlying pre-tax profits rose seven per cent to £18m in the year to December 31 while revenue rose 10 per cent to £149m.

“For the eleventh consecutive year we have increased our market share and, as a result, strengthened our position as the leading operator in the retail replacement window and door market,” said Mr Birmingham.

“During 2015 we continued our geographic expansion by opening three new sales branches, added conservatory upgrades to our product range and introduced an improved suite of promotional consumer finance options.”

Mr Birmingham said that sales rose by around 12 per cent in the second half of 2015.

“That’s been maintained and even slightly increased in 2016.”

He said that the group is well positioned to continue to grow market share, expand its sales branch network and broaden its product range.

One growth area is conservatories.

“It’s an opportunity for us,” said Mr Birmingham.

“These plastic boxes were put on homes 20 years ago. They’re too hot in the summer and too cold in the winter. We take down the old frame and replace it with modern, energy efficient frames.”

The group is hoping to put up 450 conservatory frames this year and 900 next year.

It added that order intake has been very strong in 2016, giving it the confidence that it will maintain successful progress in the year ahead.

As a reflection of this confidence the group announced the payment of two dividends.

It will pay out a final dividend of 6.8p per share giving a total ordinary dividend for the year of 10.2p per share.

it will also pay a special dividend of 6.8p per share.

Analyst Matthew McEachran at N+1 Singer said: “As we hoped full year results are slightly ahead of expectations. Earnings per share grew 11.2 per cent in the second half and trading so far in the current year is said to be very strong, with the order book up well over 10 per cent.

“As hoped, Safestyle has also announced a £5.5m special dividend, giving a total return of 13.6p in July.

“Factory expansion plans have also been formalised, which will add 100 per cent capacity, a new glass furnace and yield efficiencies. Given the momentum in the business, and its strong market positioning, we maintain a ‘buy’ stance.”​

The £7m investment at the group’s factory in Wombwell, near Barnsley, will increase capacity by 100 per cent.

Safestyle reported a record 60,134 installations in 2015. Average unit sales price rose 5.4 per cent to £531.

Analyst Charlie Campbell at Liberum said: “Safestyle’s 2015 results were strong, as expected, with sales growth of around 10 per cent driven by another year of market share gains.

“Growth improved in the second half due to the success of the finance offer, with momentum continuing into 2016.

“A surprise special dividend of 6.8p should increase investor focus on high and rising free cash flow.”