Published On: Tue, Apr 28th, 2015

Safestyle UK post impressive results as sales and profits continue to rise

safestyleSafestyle, the window and door retailer has issued full year results for the year ended 31 December 2014. The results are impressive and reveal revenue rose 9% from £124.8m to £136m with gross profit up 10% from £45.2m to £49.7m on the previous year. Sales leads generated from media and internet marketing have grown by 10.9% to 52,842 (2013: 47,660), while a record 57,682 installations were completed with volume of frames installed increased by 7.0% to 267,642 (2013: 250,185). The results also showed average unit sales price was up 1.6% to £504 (2013: £496); average order value up 3.8% to £2,806 (2013: £2,704); growth in market share to 8.48% from 7.85% at prior year end.

Steve Birmingham, CEO of Safestyle UK plc, said: “Safestyle UK has again achieved impressive revenue growth and improved its margin which have resulted in a record level of profit in 2014. We have continued to increase our market share and therefore maintain our position as the leading player in the highly fragmented and competitive replacement window and door market. The business is well positioned to build on these results as the general economy and RMI (repair maintenance & improvement) market continues to recover. Moreover, our dedicated focus on quality and price together with our continued geographic expansion into the South and South East as well as our forthcoming entry into the conservatory refurbishment market should lead to further growth.”

Whilst FENSA data reported a 3.1% contraction in the overall market in 2014, the company has continued to gain market share increasing from 7.85% to 8.48%. The FENSA data for 2014 showed mixed market dynamics, with the first half up 4.3% by volume (Safestyle installation volumes were up 4.8%), but the second half down by a marked 10.0% (Safestyle up 4.7%). Chairman Mr Halbert commented: “We are pleased with our market share gain and continue to drive towards our medium-term target of 10%. We ended the year with our order book up 3% by value compared with 2013.”

The Group has continued to grow its digital and internet presence and leads generated from direct response channels now account for 31% of all business. Whilst door canvassing will remain an important source of lead generation, Safestyle believes its increased focus on direct digital marketing will enable it to continue to gain market share and reduce average lead generation costs.

Steve Birmingham also relayed the importance of manufacturing investment: “During the year we invested significantly in our Wombwell manufacturing facilities in Yorkshire. In particular we upgraded the glass furnace, installed a new sash line and added a new machining and cutting centre. We have already seen improvements in efficiency and quality as a result of this investment. We will retain the flexibility to further invest in our manufacturing site to respond to our growth requirements and will keep the structure and capacity of our site under review to ensure we can meet our medium- and long-term plans.”

Whilst Safestyle’s core market and strength remain in the manufacture and installation of replacement windows and doors, the Group has been conducting a feasibility study into the launch of a new product offering focused on the conservatory market. Steve Birmingham added: “We have been very encouraged by the initial feedback and as a result will begin the roll-out of the new service across an initial eight sales branches in April 2015. The service will focus on conservatory refurbishment where we will replace the roofs and frames of poorly performing conservatories onto existing bases. The roofs will be sourced as complete units from the leading UK conservatory roof manufacturer and the frames will be produced in our own manufacturing facility. There are currently around four million conservatories in the UK, many of which were installed in the 1980s and 1990s. We estimate that the refurbishment market totals approximately 20,000 conservatories a year with further growth expected, driven by new glass and insulation technology that has vastly improved the energy efficiency of a traditional conservatory.”

Turning to the future, Mr Birmingham added the company will continue to drive to grow its market share whilst building its geographic penetration. He commented: “We are seeing material benefits from the significant investment we have made in new manufacturing equipment and we are excited about the prospects of our entry into the conservatory refurbishment market. Moreover, our robust cash generation and strong financial position enables the Group to retain the flexibility to balance shareholder returns with the ability to take advantage of our leading position within a fragmented market should the opportunity arise. We believe that consumers will continue to invest in home improvement.”