Bradford-based Safestyle UK reports strong trading but highlights exposure to COVID-19 disruption as staff self-isolate
Safestyle UK, which is a retailer and manufacturer of PVCu replacement windows and doors, has issued a trading and operations update for the six months ended 4 July 2021.
The group said expects to report revenues of around £72.9m over the period, an increase of 13.1% over 2019 and 73.1% over 2020.
Mike Gallacher, CEO of Safestyle, commented: "The group has traded strongly through H1 (the first half of the year) and continued to make good progress on its strategic agenda, including levelling up the performance of our national sales and installations network, transforming our customer experience and driving our sustainability agenda.
"This strategic progress has been made despite the continued operational challenges created by the pandemic and the associated market volatility experienced in the first half of 2021.
"Despite these current uncertainties, in light of our positive H1 revenue growth, margin improvement and current order book, the board expects 2021's full year financial performance to be ahead of current market expectations."
The statement added: "As reported in the AGM statement in May, the group has made good progress on improving its margins which have increased versus both comparative periods.
"This continued improvement in margin performance is after the impact of cost inflation in resin, other materials and resource-related costs which have been widely reported in our sector."
"As expected, the key national milestones reopening the economy have slowed consumer demand in our sector and this is reflected in our recent order intake following a very strong first quarter. As a result, the group has utilised some of the record order book that had been built since May 2020. Notwithstanding this, the order book at the end of June 2021 remains very healthy at c.10% ahead of June 2020 levels."
"The business continued to invest in recovering customer service performance during H1 following the significant operational issues that have impacted the business from the COVID lockdowns in 2020 and 2021. This work is closely aligned with our strategic priority of driving growth through enhancing the quality and consistency of our customer experience."
Looking ahead, the group said it remained exposed to two short term uncertainties.
The statement said: "Firstly, the market remains volatile, although demand now appears to be returning to more normal levels as consumer spending opportunities broaden. The extent to which this will be mitigated by the current record levels of household savings and the impact of the recent surge in home transactions is uncertain.
"Secondly, we are currently experiencing an elevated level of operational disruption due to employees being required to self-isolate as a result of the country's increasing levels of COVID infection rates and related self-isolations of close contacts.
"This is already having an impact on the business and looks likely to adversely impact our customers' availability, our factory and our supply chains if not rapidly addressed by the Government. The senior management team are managing the situation closely with the aim of sustaining stable operations utilising our COVID-safe practices that have been embedded in the business since early 2020."
"Despite these current uncertainties, in light of the positive revenue, margins and current order book, the Board expects 2021's full year financial performance to be ahead of current market expectations."