This morning Safestyle UK provided an update on it’s ongoing litigation case. The settlement reads as a big win for Safestyle, as a result, their share price this morning shot up.
The statement
Here is the statement provided by Safestyle UK in full:
Safestyle UK PLC (“Safestyle UK” or the “Company”) today announces the settlement of its claims against NIAMAC Developments Ltd (trading as SafeGlaze UK) for alleged trade mark infringement, passing off, misuse of confidential information, malicious falsehood and various other matters. As a result of interim applications to the court, a series of injunctions were put in place in May and in July.
In the settlement, NIAMAC has agreed that the existing court injunctions will be replaced by appropriate undertakings to the court. The settlement ensures that there will be no misuse of confidential information or misleading statements to customers. The settlement governs future relations between Safestyle UK and NIAMAC to prevent the possibility of any acts of intimidation or harassment of Safestyle UK representatives. In addition, SafeGlaze UK has agreed to change trading name and rebrand fully within an agreed period of time.
Further details of the settlement will remain confidential.
The Board of Safestyle is pleased that the Company has reached a settlement with NIAMAC. Safestyle UK remains the UK’s leading window company and the management team looks forward to refocusing its efforts with this case now successfully concluded and behind them.
Safestyle UK PLC will announce its Interim Results on 20 September 2018.
There are some large ramifications because of this settlement.
Get the original statement in full here
Analysis
This is a rare good day for Safestyle. They have spent much of their recent time fighting for market share, restructuring their business to remain relevant in today’s much-changed fenestration sector. They have seen their share price decline to just one tenth of their all-time high not all that long ago.
As a result of this statement, their share price rose to nearly 50p per share:
Credit: Bloomberg
In terms of value, this is still very much lower than it’s previous prices. On a percentage basis it’s a very good day.
This isn’t the end of the road however. This cuts out one problem of many that the company still has to face. Profit margins still have to be re-built. the cash pile needs to be recovered. Genuine restructuring of the company remains a high priority. Their sales methods rapidly need altering to service a more informed and straight talking consumer. All of these problems had nothing to do with SafeGlaze UK. It’s worth noting that they’re not going away either.
In the statement, it says that SafeGlaze have agreed to rebrand. So they’re going to continue to operate, and most likely in as aggressive a form as possible, within the letter of the law. That means market share will still be a fight for the company.
On the flip side, this is a blow to SafeGlaze. There’s no doubting that they were starting to make waves as a business, and recognition was picking up. Those adverts were being talked about, not positively, but talked about nevertheless. No doubt they will be keen to get going once again.
This is a win for Safestyle, but by no means the end of the issues. There is much work to do as a company to get them back on the right track. They are due to give a trading update on the 20th of this month. It will be interesting to see if the company can hold on to their share gains once results are published.
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