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  • Writer's pictureMark Watson-Mitchell

Potential remains at Safestyle, says Liberum

Safestyle UK (SFE) has encountered some headwinds but shares in the provider of PVCu double glazed windows and doors still have potential, says Liberum.

Analyst Charlie Campbell retained his ‘buy’ recommendation but reduced the target price from 75p to 60p on the stock, which rebounded 9.6% to 24.5p on Friday after a bruising week. The shares are down from about 55p a year ago.

The business reported a first-half operating loss before tax of £1.7m, with the fall on the prior year mainly down to a cyber-attack in January.

‘This hit installed volumes and held up a key price rise,’ said Campbell. ‘Despite slower sales in the hot summer and factory disruption in abnormal temperatures, management has decided to keep investing to improve long-term prospects and business quality and maintain momentum.’

Although Campbell cut 2022 and 2023 profit estimates to £0.5m and £8.5m, respectively, he said shorter-term investment maintained longer-term momentum.

‘We still see the potential for shares to recover to over 120p, but move our target down to 60p based on 10% 2023 free cashflow as the market may take time to discount full recovery prospect,’ he said.

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