Safestyle wins bigger market share

The Bradford-based firm, which floated on AIM last month, said annual revenues jumped from £110m to £124m.

The firm increased market share to 7.85 per cent, up from 7.49 per cent, and said order intake in the first three weeks of 2014 has got off to a positive start, exceeding management expectations.

As well as its own growth, the overall market grew by 4.5 per cent – the first year of growth since 2007.

Chief executive Steve Birmingham said profit for the year will be in line with management’s expectations and the order book at the year end was strong.

Over the year the number of installations increased by 9.4 per cent to 55,112 and manufacturing rose 7.5 per cent to 250,185 frames.

The company will announce its 2013 results on March 31.

Mr Birmingham said: “The company has experienced strong growth in a difficult market, driven by the outstanding quality of our product, the focus on executing our strategy and the dedication of our staff. As economic conditions continue to improve and as we increase our geographical presence into the South of England we feel confident in a bright and successful future as a PLC.”

Analyst Andy Hanson at Zeus Capital, the company’s financial adviser, said: “This trading statement paints a positive picture of current trading with the performance in the fourth quarter suggesting profitability for the full year will show a significant improvement on 2012.

“The increase in market share to 7.8 per cent is a 36bp improvement during the year suggesting management’s target of 10 per cent market share by December 2016 is attainable. The increase is a continuation of the trend seen over the last five years, indicating the strength of the Safestyle business relative to its competitors. It should also be noted that growth has been achieved at a time when the market has declined by 32.3 per cent since 2007.

“Today’s statement highlights that 2013 could prove a watershed year for the industry with growth returning in both unit and installation terms for the first time since 2007.”

The company floated last month with a market capitalisation of £78m, making it one of the largest AIM floats of last year.

Analysts at Killik & Co said: “Whilst the recession has had a very negative impact on the industry as a whole – installation volumes have fallen by 35 per cent over the last five years – Safestyle has actually grown volumes by over 11 per cent over this period, increasing its market share from 4.4 per cent in December 2007 to 7.5 per cent in December 2012.

“We attribute this market outperformance to the group’s strong value proposition. Unlike larger national peers Everest and Anglian, Safestyle is focused only on the manufacture and sale of replacement windows and doors, whereas peers have diversified into solar panels, driveways and conservatories amongst other things.”

Safestyle said the flotation has increased its credibility.

“It was a lengthy process, a lot of due diligence, a lot of hurdles to leap. It’s an endorsement of the business,” said Mr Birmingham.

Safestyle is one of three big double glazing players in the mar- ket.

Alongside Everest and Anglian, the three firms account for a 20 per cent share of the market. The remaining 80 per cent is shared between 20 and 30 regional companies and hundreds of local traders.

“We’ve got a value proposition, “ said Mr Birmingham.

“We call it the Aldi effect. People are pleasantly surprised that they can buy a good quality product for less than our rivals.

“We exceed people’s expectations. We have a very high quality product for a very good price.”

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