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Shopfitter Havelock Europa reports heavy loss

24 Jun 10 Shopfitting firm Havelock Europa has made a pre-tax loss of £5.9m for the year ending 31 December 2009.

Shopfitting firm Havelock Europa has made a pre-tax loss of £5.9m for the year ending 31 December 2009.

The Scottish-based company, which operates in the education, retail, healthcare, and corporate offices sectors, made a £7.7m profit in 2008.

Turnover was down by 21% to £108.5m, against £137.6m the previous year.

Havelock was hit by exceptional costs of £3.6m, due to the transfer of its Retail Interiors manufacturing operation from Dalgety Bay to Kirkcaldy and its integration with ESA McIntosh, the firm's principal Educational Interiors business.

Its net debt increased to £19.4m at year end, compared to £11.7m at the end of 2008, chiefly as a result of the pre-tax loss.

Havelock recently agreed new facilities with its bank, which total £33m, of which two thirds is committed until July 2012.

The firm's Educational Interiors business increased revenue by 9% to £56.8, but the division made a loss, partly due to restructuring and poor weather at the end of the year causing projects to be delayed.

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Its Retail Interiors division saw revenue reduced by 47% to £31.9, and it also made a loss. The reduced revenue reflected lower levels of activity by all customers.

On 1 April 2010, chief executive Hew Balfour stepped down and was replaced by former Carillion director David Hurcomb on an interim basis.

Hurcomb said: “In 2010, the Board is not expecting a full return to normal trading conditions in the markets in which the Group operates. The level of PFI related revenue in Educational Interiors will fall as a consequence of the reduction in activity in Scotland following the completion in 2009 of a large number of projects.

“However, the Retail Interiors business has been successful in winning business from new customers, including H&M and Orange. The business has also been appointed as one of four National Contractors to the Lloyds Banking Group. All of these opportunities will generate revenue in 2010, and are expected to increase in subsequent years.

“The Board’s expectation for the half year is for the Interiors Division to trade at a lower level than in 2009 but with a second half performance in line with the historical pattern of a strong second half emphasis in trading.

“Since the end of the year, the Group has incurred exceptional costs relating to its refinancing and reorganisation, and its current cost saving programmes will lead to further one-off costs. For the full year, however, the Board continues to believe that there should be a significant improvement in the Group’s trading.”

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