REG - Safestyle UK PLC - Cyber and Trading Update and Notice of Results

Safestyle UKAnnouncement

28/02/2022 07:00

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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
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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 £12m).

 

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 Broker)      Tel: 0203 829 5000

 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 (http://www.safestyleukplc.co.uk) or
www.safestyle-windows.co.uk (http://www.safestyle-windows.co.uk) .

 

 

 

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