Safestyle UK plc (LON:SFE) shares were shattered today as double glazing group issued another profit warning, which underlined the flagging growth in the UK economy.
The warning is the group's second in as many months. In July, the firm said given a weak market and uncertainty, profit for the year was expected to be lower than previously forecast.
And since then, its order intake has declined "beyond the board's expectations", the firm added.
The latest FENSA (double glazing regulator) statistics, have shown that installations were down by 18% in June and July compared to 2016, added Safestyle, which expects revenue to be flat in 2017.
In late afternoon trading, Safestyle UK shares were down over 29%, or 69p at 166.5p. Analysts at Liberum Capital cut their share price target for Safestyle to 215p from 285p but kept a 'buy' rating on the stock.
Impacted by economic woes
Meanwile, Neil Wilson, senior market analyst at ETX Capital, noted that given it was only in July that the firm first warned on deteriorating trading and questions whether it suggests a slowdown in the home improvements business as Brits pare back spending
"Credit growth has slowed, with the latest Bank of England figures showing total borrowing on cards, loans and car finance grew at less than 10% in July, he said.
"Most consumers tend to require some kind of finance to install new windows so this decline has clearly impacted Safestyle. It could also start to have a greater effect on others in the sector, eg Kingfisher, SIG and Howden Joinery. Shares in Kingfisher opened 1% lower, SIG dropped 1% and Howden fell more than 2%, apparently on the read across."
Wilson added: "The UK economy has slipped to the bottom of the EU ranks this year and with consumer spending and credit appearing to slow, the outlook isn’t a lot better."
-- Adds share price, Liberum target cut --