Why Bradford windows and doors firm Safestyle is optimistic about the year ahead

Manufacturer of PVCu doors and windows Safestyle reported that underlying profit before tax was ahead of market expectations for the year ended January 2, 2022, with the firm expecting trading conditions to improve this year.

The Bradford-based firm said it had a strong net cash position of around £12.1m and that it had taken effective action to mitigate ongoing cost inflation and supply chain pressures.

Trading during the first weeks of 2022 has remained healthy with order book growing in line with the usual first quarter trading pattern.

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Mike Gallacher, CEO of Safestyle, said: "I am delighted that despite the turbulent context in which we have operated over the last 12 months we have been able to both improve our financial delivery and make strong progress on our strategic priorities.

Safestyle is based in Bradford.

"This has delivered our best financial performance since 2017 whilst also building the foundations for sustainable long-term growth.

"As a result, the Board expects 2021's full year underlying profit before tax to be ahead of current market expectations."

Safestyle expects to report revenue growth of 26.6 per cent for the 2021 financial year compared to 2020 and 13.6 per cent compared to 2019, delivering group revenues of around £143.3m, with 2019 providing a more meaningful comparative as a result of the Covid lockdown in the first half of 2020 during which the business generated no revenue for almost two full months.

Progress on improved margins against both comparative periods has been sustained for the full year. However, as a result of the historically low lead generation costs in first half of the year which normalised to pre-pandemic levels in second half, the full year gross margin, which is still expected to be over 30 per cent, is set to be lower than the 32.3 per cent reported for the first half of the year.

The group still expects to report underlying profit before tax ahead of market expectations.

Looking ahead, the board expects that the operating conditions, which have generated continuing operational challenges through the pandemic, will improve in 2022. It plans to leverage the expected operational stability versus the last two years to underpin strong investments in developing the business.

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