REG - Safestyle UK PLC - Stakeholder Engagement Update

Safestyle UKAnnouncement

03/10/2023 07:00

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RNS Number : 4481O  Safestyle UK PLC  03 October 2023

3 October 2023

 

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Safestyle UK plc

("Safestyle" or the "Group")

 

Stakeholder Engagement Update

 

Safestyle UK plc (AIM: SFE), the leading UK focused retailer and manufacturer
of PVCu replacement windows and doors for the homeowner market, today issues
the following update.

 

As reported in our recent Interim Results announcement, the Group has been
engaging with its stakeholders to discuss ways to strengthen the balance sheet
in order to support its recovery and help facilitate future growth.  As part
of these discussions, the Group has also engaged with a number of third
parties who have expressed interest in investing in the Group.

 

These discussions with both existing shareholders and other third parties have
been productive and remain ongoing. In order to achieve a working capital
injection, which will not be in the form of an equity placing, an alternative
financing structure that realises the aims stated above is currently being
sought.

 

As previously updated, the Group expects its year-end net debt to be between
£(5.5)m and £(6.5)m. At this point and into early January 2024, the full
revolving credit facility with the Group's bank (the "RCF") will be required
to support the working capital and liquidity requirements of the business.

 

At this time, the Group remains compliant with the covenants of its £7.5m
borrowing facility. However, if the losses forecast for the remainder of the
year materialise, this would generate a material shortfall versus the existing
covenants of the RCF in November. Therefore, under the current facility terms,
access to the RCF at that time could be fully restricted.

 

Alongside the discussions with existing shareholders and other third parties
described above, the Board has had good discussions with the Group's bank, who
have remained supportive, regarding renegotiating terms of the RCF in the form
of a covenant waiver. This is yet to be formally agreed and is expected to be
inter-conditional with the working capital injection referred to above.

 

The Board remains confident that it will secure the ongoing support required
to enable the Group to navigate the near-term challenges presented by what is
a difficult market context.

 

Looking further ahead, the Board maintains that growth recovery prospects are
strong and data of an ageing housing stock in need of repair underpins this.

 

The Group will provide a further update on this process in due course.

 

Enquiries:

 

 Safestyle UK plc                              via FTI Consulting

 Rob Neale, Chief Executive Officer

 Phil Joyner, Chief Financial Officer

 Zeus (Nominated Adviser & Joint Broker)       Tel: 0203 829 5000

 Dan Bate / James Edis (Investment Banking)

 Dominic King (Corporate Broking)

 Liberum Capital Limited (Joint Broker)        Tel: 0203 100 2100

 Jamie Richards / William King / Anake Singh

 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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