SFE Safestyle Uk Plc

TIDMSFE

RNS Number : 9438C

Safestyle UK PLC

28 February 2022

28 February 2022

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

Safestyle UK plc

("Safestyle" or the "Group")

Cyber and trading update and Notice of Results

Further to our announcement on 28 January 2022 regarding a cyber incident, the Group is now able to provide an update on the recovery process and impact on trading.

The incident occurred on 25 January 2022 and was a highly sophisticated attack that we are advised emanated from Russia. The impact of the attack was mitigated by recent investments to modernise our IT infrastructure. Further, through effective business continuity actions, the business has been able to continue to sell, survey, manufacture and install since the attack.

Our sales momentum, supported by our return to TV advertising on 14 February, has remained strong and our order book has continued to build. Our balance sheet, liquidity and net cash positions remain healthy and are comparable to those levels previously communicated at the end of 2021 (net cash is currently over GBP12m).

Order processing and customer services operations were, however, severely impacted by the attack and our On Time in Full ('OTIF') levels were increasingly disrupted until the relevant installations systems were successfully recovered. That recovery has now been achieved and we expect the level of disruption to markedly reduce as we return to normal business operations over the next month or so.

Whilst the issue itself is largely behind us, the Board has concluded that the interruption to our usual order processing and customer service levels, and the required recovery, will have a c.10% impact on our H1 revenues and, therefore, a material impact on our expectations for H1 earnings. This is expected mainly to impact trading in the first quarter of 2022. With OTIF run rates now quickly expected to return to targeted levels, a strong order book and a high level of confidence that we will maintain good levels of order intake, we maintain our guidance for H2.

After careful consideration, we have decided not to change our strategic investment plans in 2022, including our return to TV advertising, and we also expect, in light of the attack, to accelerate our existing multi-year IT investment plans. As a result, and in the absence of other external factors, cashflow is expected to be broadly neutral for the year.

Our core business systems are now operating effectively and our focus will be in recovering our customer service levels, sustaining our strong sales momentum and continuing our focus on our strategic agenda.

Finally, the incident has delayed the timing of completion of the audit for the year ended 2 January 2022 ('FY 21') and the Board advises that the full year results for FY 21 will now be announced on 21 April 2022. The results update and guidance for FY 21 communicated on 26 January remain unchanged.

Mike Gallacher, CEO of Safestyle, commented:

"This has been another huge challenge for the business, impacting us as we emerged out of the operational disruption caused by the pandemic. Whilst it has been tough, our people have responded with resilience, flexibility and incredible levels of commitment to ensure that we have minimised the impact on our customers and our business performance."

Enquiries:

 
 Safestyle UK plc                              via FTI Consulting 
  Mike Gallacher, Chief Executive Officer 
  Rob Neale, Chief Financial Officer 
 Zeus Capital (Nominated Adviser & Joint       Tel: 0203 829 5000 
  Broker) 
  Dan Bate / Daniel Harris / Dominic King 
 Liberum Capital Limited (Joint Broker)        Tel: 0203 100 2100 
  Neil Patel / Jamie Richards 
 FTI Consulting (Financial PR)                 Tel: 0203 727 1000 
  Alex Beagley / Sam Macpherson / Amy Goldup 
 

About Safestyle UK plc

The Group is the leading retailer and manufacturer of PVCu replacement windows and doors to the UK homeowner market. For more information please visit www.safestyleukplc.co.uk or www.safestyle-windows.co.uk.

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February 28, 2022 02:00 ET (07:00 GMT)

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