FireAngel Safety Technology Group – broker downgrades after interims announced

The six months to the end of June for the FireAngel Safety Technology Group (LON:FA.) showed some promise of profits about to show through after years of development expenditure.

The Coventry-based business specialises in home safety products, such as smoke and carbon monoxide detectors and accessories.

- Advertisement -

The group sells its products through distributors and retailers to the retail, trade DIY, fire and rescue service and utilities markets. 

The group’s first half year to end June reported a 15% increase in sales at £25.6m (£22.2m), while the underlying pre-tax loss was £1.6m (£1.5m).

Chairman’s Statement

Commenting upon the group’s outlook Executive Chairman John Conoley stated that,

- Advertisement -

“I am delighted by the revenue performance and the continuing success of our margin improvement activities. Our execution so far this year has largely conformed to our plans which delivered the expected underlying margin improvement before the combined impact of adverse currency movement and inflation.

While the circumstances outside our control have been particularly frustrating, the Board expects 2022 to demonstrate the first proof that we have turned the Company around with more still to come.”

Analyst’s Opinion

Greg Poulton at Singer Capital Markets is less confident about the group’s prospects, now rating its shares as a Hold, with a more than halved Target Price of 11.7p.

His estimates are for current year sales to rise from £43.5m to £57.1m, while its losses of £3.5m of last year could be similar this year.

For the next year to end December 2023 his figures are for £65.0m revenues and £1.6m of losses.

For 2024 Poulton estimates £75.0m sales, £2.5m profits and 1.6p of earnings per share.

Over at Shore Capital their analyst Rob Sanders forecasts that this December year-end will see £57.0m sales, with an adjusted pre-tax loss of £3.5m.

For next year he sees £61.4m sales and £0.9m of losses.

Jumping forward Sanders sees the 2024 year with £74.0m revenues and a much more encouraging £2.8m of profits, worth 1.4p in earnings per share.

Conclusion – shares to tread water

The development of this group may well be ongoing, but its various hassles make costs difficult to control.

With a backdrop of strong demand for its products, its brokers still have faith in the group’s prospects but have accepted the delays in the growth figures.

The shares, which are down 2p to 9p on the results statement, may well trade in a narrow price band for quite a while.

Latest News

Subscribe to the UK Investor Magazine email newsletter

Register for our free email newsletter and receive the latest investment news, podcasts, event information and offers.

More Articles Like This

Tagdiv Cloud library - template content.