Safestyle UK PLC (LON:SFE) shares tumbled as investors took profits on the back of the PVCu window-maker reporting increased losses in the first half of the year due to the coronavirus lockdown.
But the company said since the market reopened, it has seen a strong level of order intake, up 26% since June, and it has looked to ramp-up operational capacity to match this demand.
It wasn’t quite so simple, however, as the lockdown has also built up a large backlog of repair and service work linked to the 10-year guarantee it provides for its products.
“We have experienced some operational challenges linked to recovering the backlog of warranty work from the lockdown, our growth and recent supplier performance,” said chief executive Mike Gallacher.
“We are focused on ensuring that the impact of these issues on our good customer service levels is addressed promptly.”
The warranty backlog has reduced levels of customer service and led to the company prioritising emergency cases, with Gallacher saying this excess is expected to be “largely addressed” by the end of the year, though for some customers these are not new problems.
Thanks in part to pent-up demand from the coronavirus shutdown, the order book is now 82% ahead of last year.
For the first six months of the year, revenues came in at £42.1mln, down 35% year on year, with an underlying loss before tax of £5.1mln compared to £0.8mln a year earlier.
The shares were down 16% to 45.2p by mid morning on Thursday, giving up some of the strong gains since falling below 20p in early April.