Major connected home order
FireAngel (AIM: FA.), one of Europe’s leading developers and suppliers of home safety products, is holding its Annual General Meeting (‘AGM’) today. In order to comply with the UK Government’s COVID-19 measures which restricts, amongst other things, public gatherings of people, the AGM is being convened as a ‘closed meeting’ with a quorum of two and other shareholders will not be permitted entry on the grounds of safety.
The Company provides the following statement ahead of the AGM:
Revenue for the six months ending 30 June 2020 is expected to be over 70% of the Board’s pre-COVID-19 budget performance. As previously announced, this reflects the short-term impact of the unprecedented and wide-ranging measures the UK and international governments have taken to combat the spread of the virus.
Whilst the impact of COVID-19 over the period as a whole has been material, June has seen demand returning which led to the Company’s sales team returning from furlough in the second week of the month. Retail sales in June are expected to be ahead of last year and pricing enquiries in our higher-margin sectors have increased markedly, with real demand now expected to return across July and August. The recovery of sales in higher-margin sectors will restore the momentum of the Board’s self-help gross margin improvement plan which, given its link to sales levels, has been similarly held back by lockdown restrictions. This plan, allied to an expected improvement in margin mix, still remains central to the Company’s improved performance towards the end of 2020 and markedly so beyond.
The temporary reduction in sales has caused a short-term increase in stock levels. The Company has mitigated the consequential impact of higher working capital by securing a loan of £3.2 million through the Coronavirus Large Business Interruption Loan Scheme, as announced on 22 June 2020. Together with the net proceeds of the equity fundraising received in April 2020, this further strengthens the Company’s financial position.
Further planned changes have been made to the Board’s composition to provide it with the skills and experience required to assist in guiding the Company’s transition to a connected homes technology provider. We hope to announce shortly the appointment of a new Non-Executive Director with a track record of maximising the types of opportunity with which the Company is currently presented.
The Board continues to believe that the medium and long-term prospects for the Company’s unique technology are strong. It is delighted that the first material purchase order for its connected technology has been received, details of which are set out below, which it believes is a significant validation of FireAngel’s connected proposition.
The Board has taken a number of actions to minimise the impact of COVID-19 on the Company. It continues to closely monitor the impact of ongoing restrictions and will react appropriately to emerging events to protect the Company’s staff, customers and core business.
A further update on the outturn of the first half will be provided in late July 2020.
Major connected home order
Significant progress has been made with the Company’s first large-scale connected homes technology rollout. A large London Borough Council, with which the Company has been in discussions since before the onset of COVID-19, has placed an initial purchase order in excess of £1.0 million with its chosen electrical contractor partner for the Company’s connected home technology. A corresponding purchase order has been placed with the Company which is expected to be called off over the twelve months to July 2021. The order represents the first phase of the Council’s planned rollout of FireAngel’s connected homes technology. This is a material commitment to the Company’s connected ten-year hardware, which is expected to be followed in due course by a software licence agreement between the Council and the Company, comprising an element of recurring revenue, required to realise the full connected capabilities and compelling benefits of the solution.
The Board believes that this is one of the largest connected home ‘internet of things’ rollouts in the UK. While other pre-existing commercial opportunities continue to be progressed, commitments have been received for other new connected trials expected to take place in Q3 2020. New enquiries from social housing providers have been received over the lockdown period and we expect the momentum of the first part of 2020 to return after the summer.
For further information, please contact:
|FireAngel Safety Technology Group plc||024 7771 7700|
|John Conoley, Executive Chairman|
|Mike Stilwell, Group Finance Director|
|Shore Capital (Nominated adviser and broker)||020 7408 4050|
|Tom Griffiths/David Coaten|
Notes to Editors
About FireAngel Safety Technology Group plc
FireAngel’s mission is to protect, save and improve our customers’ lives by making innovative, leading-edge technology 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