Shopfitting contractor Havelock Europa has plunged further into the red during the first half of 2010.
The Fife-based firm posted a pre-tax loss of £4.6m (H1 2009: loss of £1.8m) on turnover of £41.2m (H1 2009: £49.2m) in its latest interim results. This was partly down to exceptional refinancing costs of £2.5m.
Net debt spiralled up to £22.3m (December 2009: £19.4m), reflecting the losses incurred in the first six months.
In its last full year results, Havelock made a loss of £5.9m on turnover of £109m.
The firm has appointed a new CEO, Eric Prescott, who was formerly managing director of Balfour Beatty Rail Infrastructure Services.
It said the integration of its Retail Interiors and ESA McIntosh businesses had delivered cost savings of £3m a year, and that it was looking for further efficiencies within the group.
Revenue in the Interiors business was down 23% to £26.6m (2009: £34.4m), with activity on educational projects suffering chiefly, showing a decline of 50% to £11m (H1 2009: £21.7m). More positively, revenue from retail grew in the period by 22% to £15.6m (H1 2009: £12.7m).
Havelock also has an educational supplies business, where turnover was down 27% to £4.8m (H1 2009: £6.6m), and a point of sale printing division where revenues grew 11% to £10.5m (H1 2009: £9.5m) on the back of World Cup business.
Chairman Malcolm Gourlay said: “This has been a period of substantial change for the business. Our re-financing and cost saving programme has led to non-recurring exceptional costs and further cost reductions are expected in the second half of the year. The benefits of these initiatives will fully materialise in 2011.”
Looking ahead, he added: “The long anticipated news of Government spending cuts will affect the level of work from educational customers, although not immediately since there remains a significant amount of work to win from confirmed programmes.
“The expectation of this was one reason for the decision to integrate the Retail and Educational Interiors businesses in 2009. The integrated operation will seek to offset the impact of this decline by winning more work from other business areas, including retail and banking customers.”