FireAngel Safety Technology Group saw its shares decline on Tuesday as the company announced that it expects lower sales and a wider pretax loss in the first half of the year due to challenging business conditions.
Sales and Gross Margin Decline
The home-safety products supplier anticipates reporting a decrease in first-half sales to around £21.4 million ($27.4 million), compared to £25.6 million the previous year. Furthermore, the gross margin is expected to have declined by four percentage points to approximately 17.9%.
Widened Pretax Loss
FireAngel Safety Technology Group also expects its pretax loss to widen to £3.7 million from £1.7 million in the prior year. Costs, including restructuring, redundancy, and consultancy expenses, increased to around £500,000 from £100,000.
Strategic Review Continues
The company has been conducting a strategic review since June to explore options for enhancing shareholder value, which may or may not lead to the sale of the company. FireAngel Safety Technology Group stated that this review is progressing and it will provide an update in due course.
Positive Outlook for the Future
Despite the challenges faced in the first half of the year, Chief Executive Neil Radley expressed confidence in the company’s future. With the net proceeds from the recent fundraising, he expects improved business momentum in the second half.
Inventory Increase and Cost Management
FireAngel Safety Technology Group reported an increase in inventory from £4.7 million to £10.0 million, which highlights lower-than-expected first-half sales. The company has implemented price increases in the second quarter to counter higher input costs and enhance margins.
