REG - FireAngel SafetyTech - Trading and Business Update

Fireangel Safety TechnologyAnnouncement

20/12/2021 07:01

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RNS Number : 1004W  FireAngel Safety Technology Group  20 December 2021

20 December 2021

FireAngel Safety Technology Group plc

('FireAngel', the 'Group' or the 'Company')

Trading and Business Update

 

FireAngel (AIM: FA.), a leading developer and supplier of home safety
products, announces a trading and business update.

 

Current trading

 

The Company announces that it remains on target to meet market expectations
for adjusted loss before tax for the year ending 31 December 2021 ("FY21"),
which represents a significant improvement on 2020. However, it expects that
the Group's revenue for FY21 is likely to be at the lower end of market
expectations. Furthermore, the Company's net debt at 31 December 2021 is
expected to be ahead of market expectations.

 

This resilience reflects the Company's ongoing and extensive efforts to
mitigate the impact of COVID-19 and the related global supply chain issues,
through continued careful management of costs and price increases. The
remaining risk to the Company achieving its market expectations for FY21 is
from developing COVID-19 related measures in any given country and related
shipping variability. Its improving financial results are driven in part by
the Group's "self-help" gross margin improvement plan which is resulting in
improving margins and a stronger control of costs. The adjusted gross margin
for FY21 is expected to be in the range of 22% to 24% (2020: 19.8%) depending
on precise currency movements.

 

The well-documented supply chain issues, as outlined in the Group's unaudited
interim results for the six months ended 30 June 2021, which were released on
27 September 2021, have continued to intensify during the second half of 2021,
with rising costs and component shortages affecting the Group's ability to
build products and increase stock inventory to meet the growing demand for its
products. FireAngel has recently been seeking to forward procure more
components than it has historically and will continue to focus on this use of
working capital to help mitigate any further impact from these issues.

 

Most recently, the Company notes that it has seen a slight improvement in
component availability which is encouraging for 1H 2022. The Board will
continue to monitor closely all supply chain developments and in late January
2022 will provide an update on this, the outturn for FY21 and prospects for
FY22.

 

Business update

 

The Company is pleased to report that its key partnership with a German energy
and efficiency service provider for the real estate sector (the "Partner"),
details of which were announced on 7 April 2021, continues to progress well.
FireAngel is working with the Partner on a fully funded research and
development programme for a new generation smoke alarm which entered the
second development phase earlier this month. Phase one of the project was
focused on defining the specification for the new generation alarm, mainly for
the German market, while phase two aims to develop the new alarm to be
available for sale by early 2025.

 

In addition, the Group's important project to source certain entry level
products, which are uneconomic to design and produce in Europe, from an
existing Chinese partner also remains on track. Having passed certification,
the production pilot is now complete, and the Company remains on target to
launch these products as planned. The project is expected to be margin
enhancing in FY22.

 

John Conoley, Executive Chairman of FireAngel, commented: "The Board is
pleased that despite severe headwinds, the Company is on track to deliver an
improved financial performance in 2021 and to have sufficient working capital
for its forecasted needs. It is especially satisfying that both gross margin
and underlying operating profit are above both 2019 and 2020 comparables.
These improvements are being delivered through the determination of our
internal teams despite all challenges.

 

"It is disappointing that the global supply chain issues have continued during
the second half and continue to impact the world economy. However, we have
made good progress against our strategic priorities, in particular our gross
margin improvement plan. The growing interest and demand we are seeing for our
Connected offering further reinforce our confidence in the long-term
opportunity for FireAngel. We look forward to providing a further update in
late January 2022."

 

 

 

For further information, please contact:

 FireAngel Safety Technology Group plc               024 7771 7700
 John Conoley, Executive Chairman
 Zoe Fox, Chief Finance Officer

 Shore Capital (Nominated adviser and joint broker)  020 7408 4050
 Tom Griffiths/David Coaten

 Singer Capital Markets (Joint broker)               0207 496 3000
 Rick Thompson/Alex Bond

 Houston (Financial PR)                              0204 529 0549
 Kate Hoare/Laura Stewart

 

Notes to Editors

 

About FireAngel Safety Technology Group plc

FireAngel's mission is to protect and save lives by making innovative,
leading-edge home safety products which are simple and accessible. FireAngel
is one of the market leaders in the European home safety products market.

 

FireAngel's principal products are connected smoke alarms, CO alarms, heat
alarms and accessories. The Company has an extensive portfolio of patented
intellectual property in Europe, the US and other selected territories.
Products are sold under FireAngel's leading brands of FireAngel, FireAngel
Pro, FireAngel Specification and AngelEye.

 

For further product information, please visit: www.fireangeltech.com
(http://www.fireangeltech.com)

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