Safestyle shuts its sites and halts work on installations

The Bradford-based firm said that in light of the current situation and recent Government guidance, it will also temporarily cease all installation activities.

The group said the decision has been made in the interests of all its key stakeholders, in particular its colleagues, customers, shareholders and the nation as a whole. Some firms have been criticised for forcing employees to work despite the Government’s attempts to limit the outbreak.

Safestyle warned the decision to temporarily halt normal activity could have a material impact on the group’s trading this year.

The firm said it has modelled the impact of a temporary closure over a prolonged period. This involved making assumptions about Government measures to support businesses and workers during this period, including the Coronavirus Jobs Retention Scheme and the VAT Deferral programme which have already been confirmed.

Safestyle said it is also waiting for an update from the Government, which it expects in the next few days, about support for its self-employed colleagues. The firm said this is crucial for many people who will be hit as a result of the pandemic.

In addition to this support from the Government, Safestyle said it is taking prudent action to manage near term challenges, whilst ensuring the business is well positioned to deliver its long term plans. These actions include removing costs, including marketing costs, and non-critical capital expenditure from the business.

Based on these modelling assumptions and with the continued support of the Government and the group’s key funding partner, the board said it believes the group has the financial capacity to withstand the impact of a closure of its sites beyond the end of June 2020.

Safestyle said that providing financial guidance for the year to December 31 is impossible in the current environment. The firm said it will provide further information when it is able to.

The group will keep its temporary site closures and installation cessation under continuous review and provide further updates when appropriate.

Analyst Charlie Campbell at Liberum said Safestyle is well placed to withstand the temporary shutdown and recover quickly.

“Safestyle’s strong order book should allow revenues to return quickly especially if it furloughs employees during the temporary shut down,” he said.

“However, its installers, surveyors, sales and canvass teams are all self-employed. The scale of this function may be at risk unless the Government also launches assistance packages for the self-employed, but this is now widely expected in the UK press.

“Safestyle’s finances are stronger than its peers and it is more profitable. This should mean it is very well placed to participate in any recovery once the Covid-19 outbreak is contained.”