Safestyle UK, a door-and-window manufacturer listed in London, revealed that it expects to report a loss for the first half of this year due to the challenging economic conditions that have dampened consumer demand. As a result, the company’s full-year performance is likely to fall below current market expectations.
For the six months ending on July 2, Safestyle UK predicts an underlying pretax loss of approximately £6 million ($7.8 million). The company also anticipates a 5.4% decrease in revenue, with projected figures reaching £74 million compared to the same period last year.
As news broke, Safestyle UK shares plunged by 45% to 10.0 pence at 0756GMT. The company attributes these disappointing results to high inflation and interest rates, which have strained consumers’ finances and eroded their confidence. Additionally, Safestyle UK has been burdened by increased costs. As a result of these factors, recent order momentum has slowed, leading the company to anticipate a full-year performance that falls significantly short of market expectations.
Despite these challenges, Safestyle UK is optimistic about its future prospects. The firm has witnessed the positive impact of its recent marketing efforts, which it believes will contribute to gaining market share in the second half of the year. Consequently, Safestyle UK expects to generate an underlying pretax profit of around £500,000.
The company’s financial stability remains intact, as Safestyle UK foresees positive net cash at year-end and claims full compliance with existing loans. Moreover, an efficiency program has been implemented to address the current economic pressures, resulting in cost savings of approximately £2 million. As part of this initiative, some redundancies have been made.
Investors and stakeholders can look forward to receiving the complete results for the first half of the year on September 27.