Havelock Europa PLC
25 June 2002
HAVELOCK EUROPA PLC
CHAIRMAN'S AGM STATEMENT 2002
'A most encouraging start to the year'
At the AGM in Dalgety Bay, Fife this afternoon of Havelock Europa PLC, the
retail and educational interiors and point of sale display business, the
Chairman, Michael Kennedy, will make the following remarks.
'The Group has had a most encouraging start to the year.
Point of Sale Display
The Point of Sale Display companies, Showcard and Hartcliffe, have made
substantial further progress in their penetration of the supermarket and global
brands sectors. This broadening of the customer base, started last year, has
continued and further dilutes the traditional dependence on fashion retailers.
Orders to the end of May were 17% up on the same period last year. New capital
investment has taken place at both the Bristol and Letchworth plants along with
the acquisition of additional space to improve the facilities for packing and
collating the increased volumes of business experienced by each plant.
In the educational furniture sector, ESA McIntosh, the Fife based UK market
leader which Havelock acquired last September, has continued to make good
progress, helped by further success in PFI contracts across the UK. In addition
to the two contracts for schools in Liverpool and Cornwall, mentioned at the
time of the Preliminary Announcement, initial work has now begun for PFI
contracts centred at Stockton and Brighton and, in London, at Merton, Haringey
and Redbridge. With orders to the end of May running 11% ahead of the same
period last year, and with the continuing consolidation of McIntosh's position
in the Scottish PFI market, the company is likely to record another good result
for the year.
The division has spent much of the first five months of the year successfully
rationalising and reorganising its activities, following the decision to
consolidate all manufacturing at the Group's premises in Dalgety Bay, Fife.
With the Nottingham site sold for £3.3 million and completion scheduled for 28
June, a major reduction in overheads will take place in the second half of the
year. An exceptional profit of approximately £350,000 will be included in the
half year accounts relating to the sale of the property. All necessary
machinery has been transferred to Dalgety Bay and some 80 new members of staff
have been recruited and are operational at this site. Following extensive
training, productivity is starting to improve and, although the first half of
the year will carry the costs of operating two factories, a substantial
improvement in results is expected in the second six months.
As at 31 May 2002 orders were more than double those for the same period in 2001
and included a useful forward order book for House of Fraser, incorporating a
major refurbishment of its Metro Centre store outside Newcastle. The
relationship with Primark continues to strengthen and a number of new clients
have been won, including Fenwick for whom a new store will be fitted out in
Canterbury. In addition, the division has completed a number of stores for
Sainsbury and for the first time a significant amount of work is being done in
the grocery sector.
Middle East Interiors
After the exceptional performance of 2001, the Middle East retail and leisure
interiors joint venture based in Bahrain is expected to have a slightly lower
level of trading activity in 2002, as was anticipated in the Preliminary
Announcement. Whilst the retail sector continues strong, business in the
leisure sector has been more muted. Nevertheless, the prospects in this area
Overall the Group results for the first six months, which is traditionally much
the weaker half, are expected to show a major improvement over those of 2001.
As a result of improved levels of activity in the UK divisions in the first half
of the year, and an encouraging outlook for the second six months, the Board is
confident that the Group will meet its expectations for the current year and is
on course to create further significant value for shareholders'.
Havelock Europa PLC 01383-820044
Hew Balfour (Chief Executive) Mobile: 07801-683851
Bankside Consultants Limited
Charles Ponsonby 020-7444 4166
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