Window manufacturer Safestyle UK saw shares tumble nearly 20 percent on Wednesday morning, after warning that it would be likely to report an underlying loss for the full year.

The group, who manufacturer PVCu replacement windows and doors to the UK homeowner market, said gross margins had been impacted by higher digital marketing costs and sales commissions.

In an update to the markets the Board and Executive Team laid out three key priorities – the stabilisation of Safestyle’s organisation, the previously announced legal action against NIAMIC Developments Ltd (trading as SafeGlaze UK) and a comprehensive review of the Group’s current trading and outlook.

Despite an increased order intake over the last few weeks, “albeit at a lower level than the previous management team had expected”, gross margins had been impacted over the recent period.

After assessing the market and operational outlook for the remainder of the year the group said:

“Providing there is no further material deterioration in market conditions, we expect Group revenues to be below market expectations and for the Group to report a small underlying loss before tax for the full year”.

“Over the medium and longer term, the Board remains confident of the Group’s prospects. The Board expects exit momentum from the current year to benefit from the programme of costs and margin improvement actions now in train which are expected to result in material annualised savings benefiting future financial years.”

Shares in Safestyle (LON:SFE) are currently trading down 17.86 percent at 40.82 (1041GMT).