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Safestyle shares shatter as it warns on profit again, scraps dividend
(WebFG News) - Double glazing group Safestyle was under the cosh yet again on Monday after another profit warning, as it scrapped its dividend and announced the resignation of its non-executive chairman.
The company, which issued profit warnings in December and February and was slapped with an £850,000 fine from the Health & Safety Executive earlier this month, said group revenues and underlying pre-tax profit for the year to the end of December 2018 are now likely to be "significantly below" current market expectations, with profits heavily-weighted to the second half.
Safestyle had said back in February that it had been hit by the activities of an "aggressive new market entrant", which had exacerbated an already difficult market. It said on Monday that since then, the activities of this competitor have intensified and it has taken longer to rebuild the order intake to the rate previously expected. In addition, the company has experienced cost increases as management addresses these challenges.
"The board remains resolutely focused on protecting Safestyle's leading market position. Early evidence shows that the group's sales and canvass teams are more effective in those locations where rebuilding has occurred. As an immediate priority, the board is undertaking a detailed strategic review of its operations and has a number of measures in hand aimed at addressing the competitive situation and improving performance."
The group also said that it was scrapping the final dividend of 7.5p per share that was due to be paid next in June "in order to provide the company with the strongest balance sheet from which to protect and strengthen its position".
Safestyle announced that non-executive chairman Steve Halbert has resigned from the board with immediate effect and will be replaced by non-executive director Peter Richardson.
At 0930 BST, the shares were down 19.2% to 64.64p.