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Ultraframe Shares Plummet 15% Amid Third Profit Warning in Six Months

Strategic Insights

— 1 min read

Shares in Ultraframe, the UK-based conservatory roof manufacturer, fell 15% last year after the company issued its third profit warning in six months. Analysts cut their profit forecasts by as much as 20%, citing a significant decrease in sales in January and February. The company's chief executive, David Moore, attributed the decline to a worsening macro-economic environment and a reticence among buyers.

Key Takeaways:

  • Ultraframe shares plummeted 15% following the company's third profit warning in six months, with analysts cutting profit forecasts by up to 20%.
  • Sales in the UK, which account for around 70% of the company's total, were hit by a worsening macro-economic environment and a decrease in demand from "empty nesters".
  • Chief executive David Moore attributed the decline to "cold feet" among the company's biggest sales segment, with an uncertain pensions portfolio being a possible factor.
  • Ultraframe still sees demand in the budget end of the market, where younger people are more willing to borrow money to gain an extra room for their house rather than move, but faces aggressive price competition in this segment.
  • The company has commissioned market research that suggests there are 12m "addressable homes" ripe for conservatories and a take-up of around 200,000 homes per year nationally.
  • In the US, Ultraframe was hit by the timing of a reorganisation of its franchisees, with 130 deletions and only 60 new additions.
  • The company confirmed that it would hold its dividend unchanged, despite the decline in sales and profit forecasts.

Statistics:

  • Ultraframe shares fell 35p to 194p.
  • Sales in the UK decreased by 16% in January and February.
  • The company's profit forecast was cut by up to 20% by analysts.
  • Luxury home buyers (empty nesters) account for approximately 70% of Ultraframe's sales.
  • There are 12m "addressable homes" ripe for conservatories in the UK.
  • The take-up of conservatories in the UK is around 200,000 homes per year.

Sources:

  • Londond, Page 22 (no date provided)
  • Interview with David Moore, Chief Executive of Ultraframe (no date provided)

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