Safestyle to resume trading by end of May
Safestyle UK
0.32p
17:30 15/01/24
Safestyle updated the market on its trading on Thursday, reporting that since the end of March, all of its locations have remained temporarily closed, with all survey and installation activities paused.
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The AIM-traded firm, which was holding its annual general meeting, said that during the lockdown period, it had furloughed the majority of its workforce and benefitted from the government's Coronavirus Job Retention Scheme in covering the majority of the ongoing staff costs.
It had kept a limited number of employees working to maintain telephone contact with customers, and provide them with emergency service support alongside regular updates on the status of their orders.
“Immediately following the temporary cessation of our operations in March, the company successfully raised £8.5m in a share placing and obtained a covenant waiver on its existing borrowing facilities for the duration of the lockdown period from its lenders,” said chairman Alan Lovell.
“Together with the initiatives undertaken to preserve cash, these actions have strengthened the group's balance sheet and resulted in available liquidity in excess of £12m at the date of the AGM.”
In light of the government's updated guidelines, Safestyle’s senior management said they were now planning a restart of commercial operations.
The plan was based on a “phased and measured” return to work for the business, and would involve a number of temporary changes to its policies and practices to ensure the safety of staff and customers.
“As a business, we are confident in our ability to operate in line with the Covid-19 Secure guidelines, as soon as it is permissible to do so,” Lovell said.
“With the necessary health and safety measures in place, the company is currently expecting to restart operations, including manufacturing, installations, surveying and selling activities by the end of May.
“Staff working in the company's various support functions will also begin to return to work in line with this phased restart, although the company will continue to ensure people who are able to work from home do so.”
Lovell said that there remained “high levels of uncertainty” around consumer demand for the year ahead, the challenges of selling in home, and the competitive environment.
The company would seek to adjust to that operating context “rapidly”, and would continue to use the Coronavirus Job Retention Scheme as required through the summer, while maintaining “tight controls” on its cost base and closely monitoring available liquidity.
“It remains impossible to provide financial guidance for the year ending 31 December in the current environment pending further certainty of the impact of the Covid-19 pandemic on consumer confidence and any negative impact on established ways of working.
“As and when we are able to provide further information we will do so.”
While the short-term outlook remained uncertain, the board had considered various scenarios as part of plans to re-start operations safely in response to customer demand, Lovell explained, and continued to target the progress made in its turnaround plan.
“Moreover, the business is more resilient with a leaner fixed cost base and considerable liquidity to underpin its ability to navigate through the challenges presented by the pandemic and return to its plans as quickly as possible.”
At 1227 BST, shares in Safestyle UK were down 5.56% at 25.5p.