Fittings firm 'right sizing' for market
Havelock axes 50 jobs at Kirkcaldy in company shake-up
The job losses equate to 10% of the workforce and the company is entering into consultation from today. It is understood most of those affected work at its Kirkcaldy factory and head office.
Teacherboards, a business based in Skipton, North Yorkshire, is being sold to Gloucestershire firm Sundeala for £1.4 million.
The announcements came in a trading update in which it said results for this year will be “materially below” expectations. Shares in the company tumbled by 27.54% or 4.75p to 12.5p.
Mr Ritchie initiated a review of the business on his appointment in May and says it will lead to “right-sizing” the business to a level and cost structure that will enable it to deliver a sustainable, consistent level of profit on a more modest sales target.
The planned changes will reduce operational gearing and deliver expected annualised cost savings of £3m.
Teacherboards is an educational supplies business that manufactures, procures and distributes display boards, presentation equipment and other related products. It was acquired by Havelock in 2004.
The sale is expected to reduce the group operating profits in the short term and he proceeds will be used to reduce the group’s net debt, which at 30 June was £3.1m.
As a result of subdued demand, the board said the results for the year ending 31 December 2015 will be materially below previous guidance.
In a statement Mr Ritchie said: “Our customer survey and review of the business demonstrates that these changes are necessary. We are rebasing the business to reflect the more competitive market place. No decision to reduce jobs is ever taken lightly, and we will do everything possible to support those colleagues affected.
“I am confident that the sale of our non-core business brings more focus to the group as a whole. The simplified business model will enable us to maximise the customer experience and allow us to continue to diversify our customer base and achieve future growth.”
Speaking to Daily Business, he added: “The advice we have received is that we have to change how we do some things. We have to keep things slick and lean.”
The process may mean involve a change in the product offering. He was unable to say at this stage if the staff cutbacks would involve senior management.