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.
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.
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