Havelock Europa ‘seeing benefits’ of restucturing

David RitchieOffice and shop fitting company Havelock Europa, based in Kirkcaldy, said its job cutting programme had achieved its target and trading in the final quarter was as expected.

The board now expects the trading results for the year ended 31 December to be in line with its expectations at the time of the trading update given on 1 September.

In a trading update it said business continues to focus on “careful management” of its working capital and the Group is debt free, with net cash of £1 million, comprising cash of £1.9m and finance leases of £0.9m. This compares with £200,000 of net cash at 31 December 2014.

The board expects to announce full year results on 14 April.

David Ritchie (pictured), chief executive, said: “We are beginning to see the benefits of the measures taken in late 2015 and, although trading continues to be challenging, particularly in the retail sector, we are encouraged to enter 2016 with an order book of £23m for in-year delivery which is 15% up on 2015.”

In November, the company said its biggest financial services client, understood to be Lloyds Banking Group, said it was cutting back on refurbishment this year.

Havelock said contracting revenues from the client for 2015 will be about £14m and will be unaffected by the new arrangements which took effect from 1 January.

This means there will be little financial impact on 2015 results, but the impact on 2016 will be material “before mitigating actions are undertaken”.

On his appointment as chief executive last May, Mr Ritchie initiated a review of the Havelock Europa business which led to plans for about 50 job losses, mainly at its Kirkcaldy headquarters.

He also announced plans to diversify its customer base, and a streamlining and simplification of the business model.

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