FireAngel Safety Technology Group Trading and Business Update (1004W)
20 December 2021 - 5:59PM
UK Regulatory
TIDMFA.
RNS Number : 1004W
FireAngel Safety Technology Group
20 December 2021
20 December 2021
FireAngel Safety Technology Group plc
('FireAngel', the 'Group' or the 'Company')
Trading and Business Update
FireAngel (AIM: FA.), a leading developer and supplier of home
safety products, announces a trading and business update.
Current trading
The Company announces that it remains on target to meet market
expectations for adjusted loss before tax for the year ending 31
December 2021 ("FY21"), which represents a significant improvement
on 2020. However, it expects that the Group's revenue for FY21 is
likely to be at the lower end of market expectations. Furthermore,
the Company's net debt at 31 December 2021 is expected to be ahead
of market expectations.
This resilience reflects the Company's ongoing and extensive
efforts to mitigate the impact of COVID-19 and the related global
supply chain issues, through continued careful management of costs
and price increases. The remaining risk to the Company achieving
its market expectations for FY21 is from developing COVID-19
related measures in any given country and related shipping
variability. Its improving financial results are driven in part by
the Group's "self-help" gross margin improvement plan which is
resulting in improving margins and a stronger control of costs. The
adjusted gross margin for FY21 is expected to be in the range of
22% to 24% (2020: 19.8%) depending on precise currency
movements.
The well-documented supply chain issues, as outlined in the
Group's unaudited interim results for the six months ended 30 June
2021, which were released on 27 September 2021, have continued to
intensify during the second half of 2021, with rising costs and
component shortages affecting the Group's ability to build products
and increase stock inventory to meet the growing demand for its
products. FireAngel has recently been seeking to forward procure
more components than it has historically and will continue to focus
on this use of working capital to help mitigate any further impact
from these issues.
Most recently, the Company notes that it has seen a slight
improvement in component availability which is encouraging for 1H
2022. The Board will continue to monitor closely all supply chain
developments and in late January 2022 will provide an update on
this, the outturn for FY21 and prospects for FY22.
Business update
The Company is pleased to report that its key partnership with a
German energy and efficiency service provider for the real estate
sector (the "Partner"), details of which were announced on 7 April
2021, continues to progress well. FireAngel is working with the
Partner on a fully funded research and development programme for a
new generation smoke alarm which entered the second development
phase earlier this month. Phase one of the project was focused on
defining the specification for the new generation alarm, mainly for
the German market, while phase two aims to develop the new alarm to
be available for sale by early 2025.
In addition, the Group's important project to source certain
entry level products, which are uneconomic to design and produce in
Europe, from an existing Chinese partner also remains on track.
Having passed certification, the production pilot is now complete,
and the Company remains on target to launch these products as
planned. The project is expected to be margin enhancing in
FY22.
John Conoley, Executive Chairman of FireAngel, commented: "The
Board is pleased that despite severe headwinds, the Company is on
track to deliver an improved financial performance in 2021 and to
have sufficient working capital for its forecasted needs. It is
especially satisfying that both gross margin and underlying
operating profit are above both 2019 and 2020 comparables. These
improvements are being delivered through the determination of our
internal teams despite all challenges.
"It is disappointing that the global supply chain issues have
continued during the second half and continue to impact the world
economy. However, we have made good progress against our strategic
priorities, in particular our gross margin improvement plan. The
growing interest and demand we are seeing for our Connected
offering further reinforce our confidence in the long-term
opportunity for FireAngel. We look forward to providing a further
update in late January 2022."
For further information, please contact:
FireAngel Safety Technology Group plc 024 7771 7700
John Conoley, Executive Chairman
Zoe Fox, Chief Finance Officer
Shore Capital (Nominated adviser and
joint broker) 020 7408 4050
Tom Griffiths/David Coaten
Singer Capital Markets (Joint broker) 0207 496 3000
Rick Thompson/Alex Bond
Houston (Financial PR) 0204 529 0549
Kate Hoare/Laura Stewart
Notes to Editors
About FireAngel Safety Technology Group plc
FireAngel's mission is to protect and save lives by making
innovative, leading-edge home safety products which are simple and
accessible. FireAngel is one of the market leaders in the European
home safety products market.
FireAngel's principal products are connected smoke alarms, CO
alarms, heat alarms and accessories. The Company has an extensive
portfolio of patented intellectual property in Europe, the US and
other selected territories. Products are sold under FireAngel's
leading brands of FireAngel, FireAngel Pro, FireAngel Specification
and AngelEye.
For further product information, please visit:
www.fireangeltech.com
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