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Safestyle profits drop in 'increasingly challenging' market, new CFO named
Double glazing group Safestyle posted a drop in full-year profit on Thursday as installations fell amid an "increasingly challenging" market and higher costs, as it announced the appointment of a new chief financial officer.
The company, which warned on revenues and profits at the end of last month, said pre-tax profit in the year to the end of December 2017 dropped 28.5% to £13.8m, as revenue slipped 0.5% to £158.6m.
Safestyle said profit was hit by increases in door canvass and digital lead generation costs, higher finance subsidy costs and raw material price increases due to a weaker pound and commodity price inflation.
Basic earnings per share were down 3% to 13.1p and the ordinary dividend was maintained at 11.25p.
The volume of frames installed fell by 7.9% in the year to 265,716 but the average unit sales price was 7.6% higher at £608 and the company's market share edged up to 10.7% from 10.2% the year before.
Chief executive Steve Birmingham said: "During 2017 the market became increasingly challenging and although Safestyle again increased market share, the group's financial performance was impacted primarily due to increases in lead generation costs, consumer finance subsidy costs and raw materials.
"The start to 2018 has been difficult and as previously announced our order intake has been below management expectations as a result of the continued deteriorating market, declining consumer confidence and increased competitive environment.
"We have already taken action to reduce our cost base and modernise our sales and canvass operations. We expect the major benefits of these efforts to take effect in the second half of 2018."
Also on Thursday, Safestyle announced the appointment of Robert Neale as CFO, effective no later than 16 July and replacing Mike Robinson, who is stepping down after 10 years in the role.
Neale is currently head of Leisure Travel Finance at Jet2.com and Jet2 Holidays, a division of AIM-listed Dart Group, where he has worked since 2013.
Safestyle chairman Steve Halbert said: "We are delighted to welcome Rob to the company. His appointment follows a thorough process led by the board and we look forward to him supporting and contributing to the company's further development as the UK's market leader."
Shares in the company tanked last month when it said that the activities of an "aggressive new market entrant" had exacerbated an already difficult market and warned that profit and revenues for the year to the end of December 2018 would be "materially below" the previous year and current market expectations.
At 1420 GMT, the shares were down 0.1% to 89.90p.