Shares in Safestyle UK PLC (AIM:SFE) fell over 16% to 24.22p on Thursday morning after the double glazing specialist issued a profit warning for the current year and swung from profit to loss last year.
Last year's swing to a £6.5mln statutory loss was blamed on a cyber attack in the early part of the year, a slowdown in installations during the summer's high temperatures and then UK political instability following the short Liz Truss regime that led to trading turbulence in the latter part of the year.
While 2023 started well, February and March to date have been slower than anticipated, with the order book not really having grown since the end of January, it said.
Management are committing to the plan to increase market share via strategic investment, as described at its capital markets day in November, "albeit prudently", to ensure that the year represents a return to profitability.
But it said the challenging market conditions and this continued investment mean it now expects revenue to be below current expectations.
Chief executive Rob Neale said "it is important to note that much of this investment is variable and the board will use the levers available to it should market conditions dictate more prudence. Consequently, we now expect full year underlying profit to be at least £2.0mln".
House broker Liberum said: "The 2023 estimate cut is disappointing, but it sacrifices short-term profits for longer-term growth, which is appropriate, and management is very focused on returning the group to profitability."