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Havelock Europa PLC (HVE)

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Tuesday 17 September, 2002

Havelock Europa PLC

Interim Results

Havelock Europa PLC
17 September 2002




                     HAVELOCK EUROPA PLC - INTERIM RESULTS


          'Board confident of significant change in Group performance'

•        Havelock, the Retail and Educational Interiors and Point of Sale
Display business, announces 'a most encouraging start to the year' with an
interim pre-tax profit for the first time in five years, the first half of the
year traditionally being much the weaker of the two.

•        Turnover for the half year ended 30 June 2002 increased by 42.4% to
£34.5 m, primarily through the acquisition of ESA McIntosh. A Group profit
before tax of £754,000 (2001: loss before tax £1,493,000) is reported, which
included an exceptional £399,000 profit on the sale of the Nottingham
storefitting factory in June, following its closure in May.

•        ESA McIntosh, the new subsidiary in educational furniture, acquired in
September 2001, increased turnover by 26% to £8.2m and made an excellent
contribution to the Group, reflecting significant advances as a subcontracted
supplier to PFI projects throughout the UK.

•        The Point of Sale Display businesses, Hartcliffe and Showcard,
increased turnover by a combined 17% to £12.0 m as a result of further
penetration of the supermarket sector.

•        Although the Retail Interiors Division made a loss, as a result of the
continuing seasonality of the business and the cost of operating from two sites,
one of which, Nottingham, was in the process of being closed, the increase in
turnover of 6% to £12.1m points to some recovery in the market.

•        The Retail and Hotel Interiors JV in the Middle East had a solid first
half, albeit, as expected, with reduced turnover and profit relative to 2001's
very strong result.

•        An interim dividend per share of 0.6p, up 20% on 2001's 0.5p, is
declared, reflecting the Board's intention to return to a progressive dividend
policy whilst maintaining a healthy level of dividend cover.

•        Michael Kennedy, Chairman, stated 'The Group is operating in improving
markets and has strong order books in all of its businesses.  In 2002, an
excellent contribution is expected from our newly acquired subsidiary, ESA
McIntosh, along with good growth from our Point of Sale Display businesses. From
the end of June 2002, annualised savings of £2 m in the Retail Interiors
Division's overheads have started to accrue as the business benefits from
operating from a single manufacturing site. The Board is therefore confident
that 2002 will show a marked change in the performance of the Group and that by
the end of the year the tangible benefits of the strategy announced in 2001 will
be even more evident.'


Enquiries:

Havelock Europa PLC                                                                  01383-820044
Hew Balfour (Chief Executive)                                                Mobile: 07801 683851
Graham MacSporran (Finance Director)                                         Mobile: 07801 683803
Bankside Consultants Limited
Charles Ponsonby                                                                    020-7444 4166




                              CHAIRMAN'S STATEMENT


OVERVIEW

As indicated in the Chairman's Statement at the AGM on 25 June 2002, the Group
has had a most encouraging start to the year.  For the first time for five years
the Group recorded a pre-tax profit in the first half, reflecting early success
in the Group's strategy to reduce the impact of the twin problems of cyclicality
and seasonality in retail storefitting.

The Group recorded a profit before tax of £754,000 (2001 loss before tax:
£1,493,000) on a turnover of £34.5 million (2001 : £24.3 million).  Some
£399,000 of this profit related to the sale, in excess of book value, of the
Nottingham storefitting factory in June, following its closure in May. The net
cash proceeds of this sale amounted to £3.15 million, offsetting a cash outlay
of £2.6 million in redundancy and closure costs.


DIVIDEND

The Board is pleased to declare an interim dividend per share of 0.6 pence (2001:
0.5 pence), an increase of 20%, reflecting the Board's intention to return to a
progressive dividend policy, whilst maintaining a healthy level of dividend
cover.  This dividend will be paid on 27 December  2002 to shareholders on the
Register at close of business on 15 November 2002.


TRADING

Educational Furniture

ESA McIntosh, the new subsidiary in educational furniture, acquired in September
2001, made an excellent first half contribution to the Group.  Turnover at £8.2
million was up 26% on the same period last year, reflecting significant advances
as a sub-contractor to the PFI sector throughout the UK.  The addition of the
Edinburgh Schools PFI to the work already being done in Glasgow was the largest
of the new gains in Scotland, whilst, for the first time, work was carried out
for four PFI projects in England.  A small programme of capital expenditure took
place to bring the plant at Kirkcaldy, in Fife, up to current environmental
standards and to increase the degree of mechanisation in preparation for
continuing increases in demand.


Point of Sale Display

The Point of Sale Display division experienced a marked increase in the level of
activity at each of the plants in Letchworth and Bristol.  Turnover, at £12.0
million (2001 : £10.2 million), was up 17.3% as a result of a further
penetration of the supermarket sector by all three companies.  The development
of the branded goods sector, through direct relationships with the marketing
departments of a number of manufacturers of fast moving consumer goods,
continues.  Further space has been added in the form of additional warehousing
and collation facilities in both Letchworth and Bristol to handle increased
volumes and to enhance service levels.  Both of the two printing businesses are
now making full utilisation of state-of-the-art direct projection technology
within their screen printing operations.


Retail Interiors

The Retail Interiors division achieved its target of closing its Nottingham
manufacturing plant in May, with the unfortunate loss of 166 jobs. Some 50 staff
were relocated to a new office block at Alfreton, in Derbyshire, to handle sales
and project management responsibilities for the division's southern based
customers.  The Group successfully disposed of the premises in June, achieving a
surplus to book value of £399,000.  All manufacturing is now concentrated at
Dalgety Bay in Scotland, where a new assembly operation has been established and
some 80 new jobs created.  The new facility is operating at satisfactory levels
of efficiency, after the conclusion of  a considerable programme of recruitment
and training during March, April and May.

Although the division made a loss in the first half, as a result of the
continuing seasonality of the business and the cost of operating from two sites,
one of which was in the process of being closed and prepared for sale, there
were some encouraging underlying trends.  Turnover advanced to £12.1 million
(2001 : £11.4 million).  This modest advance of 6% points to some recovery in
the market.  Furthermore, from the end of June, annualised savings of £2 million
have started to accrue as the business benefits from operating from a single
manufacturing site.

Middle East Joint Venture

The joint venture in the Middle East had a solid first half.  The Group's share
of turnover, at £2.18 million (2001 : £2.66 million), was down by 17.8%,
reflecting a significant slide in the exchange rate of the Bahraini Dinar and a
slightly lower level of activity in the retail sector.  The contribution to
profit of £269,000 (2001 : £373,000) was similarly affected.  In February, the
business completed its move to a new factory in Bahrain, permitting future
increases in capacity and an improved level of efficiency.


INDEBTEDNESS

Net debt was £17.8 million at 30 June 2002 compared with £15.7 million at 31
December 2001, reflecting the outlay of £2.5 million in respect of the first
stage of earnout  consideration to the vendors of McIntosh, paid in March 2002,
along with  increased working capital requirements as a result of sharp
improvements in the level of activity in all divisions.   Nevertheless, this
figure is well within internal expectations and represents a substantial
improvement on the overall cash projections prepared at the time of the McIntosh
acquisition.  Whilst debt is high, a useful reduction by the year end is
anticipated.


PROSPECTS

The Group is operating in improving markets and has strong order books in all of
its  businesses.

Since the half year, within the educational furniture sector, work has started
on four additional  PFI contracts in England and orders have been confirmed for
a significant new PFI contract in Fife.  The Group anticipates an excellent
result from this division in the current year with strong growth expected in
2003, as new government spending in both England and Scotland takes effect, in
line with the announcements made by the Chancellor of the Exchequer and
Scotland's First Minister.

In the Point of Sale Display division, the Group is continuing to consolidate
its position in supermarkets and the branded goods sector.  Further new capital
investment has taken place with the addition of a new two colour screen printing
line in Letchworth, in order to secure further capacity and to keep abreast of
technology.  The results for the full year for this division are likely to show
an encouraging advance.

In Retail Interiors the anticipated £2 million annualised cut in overheads,
achieved as a result of the closure and sale of Nottingham, along with improved
volumes of work for House of Fraser, the natural bias in favour of the second
half  and a recent  entry into the hotel furniture market, give grounds for
believing that a useful recovery will take place in the second half.

As anticipated, the share of profit from the Middle East Joint Venture in the
current year will be lower than the excellent result achieved in 2001.
Nevertheless the Group remains optimistic about future opportunities in the
Gulf.

Overall, the Board is confident that 2002 will show a marked change in the
performance of the Group and that by the end of the year the tangible benefits
of the strategy announced in 2001 will be even more evident.


Michael Kennedy
Chairman                                                       17 September 2002


                       UNAUDITED PROFIT AND LOSS ACCOUNT
                      for the half year ended 30 June 2002


                                                                  Half          Half       Audited
                                                                  Year          Year          Year
                                                                 Ended         Ended         Ended
                                                               30 June       30 June        31 Dec
                                                                  2002          2001          2001
                                                                         As restated   As restated
                                                    Notes         £000          £000          £000
Turnover

Group and share of Joint Venture                                34,544        24,260        63,072

Less:  share of Joint Venture's turnover                       (2,184)       (2,657)       (6,206)

                                                              --------      --------      --------

                                                                32,360        21,603        56,866

                                                                 =====         =====         =====



Operating profit / (loss)  before exceptional
items                                                              651       (1,461)           931
                                                                  
Exceptional reorganisation costs                                   399           ---       (3,750)
                                                              --------      --------      --------

Operating profit / (loss) after exceptional
items                                                            1,050       (1,461)       (2,819)

Share of Joint Venture's operating profit                          269           373         1,095

                                                              --------      --------      --------
Total Operating Profit/(Loss):
Group and share of Joint Venture                                 1,319       (1,088)       (1,724)
Interest payable less receivable
Group                                                            (561)         (397)         (904)
Joint Venture                                                      (4)           (8)          (15)

                                                              --------      --------      --------

Profit / (loss) on ordinary activities before
taxation                                                           754       (1,493)       (2,643)
Tax (charge) / credit on profit / (loss) on
ordinary activities                                     3         (27)           669           571
                                                              --------      --------      --------

Profit / (loss) for the period                                     727         (824)       (2,072)
Dividend                                                         (185)         (140)         (617)

                                                              --------      --------      --------

Retained profit / (loss) for the period                            542         (964)       (2,689)

                                                                 =====         =====         =====



Basic and diluted earnings / (loss) per share           4         2.4p        (3.0p)        (7.3p)
                                                                 =====         =====         =====

Adjusted earnings / (loss) per share                    4         3.9p        (3.0p)        (5.7p)
                                                                 =====         =====         =====

Dividend per share                                               0.60p         0.50p         2.00p
                                                                 =====         =====         =====


STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES


                                                                 Half          Half       Audited
                                                                 Year          Year          Year
                                                                Ended         Ended         Ended
                                                              30 June       30 June        31 Dec
                                                                 2002          2001          2001
                                                                        As restated   As restated
                                                                 £000          £000          £000

Profit / (loss) for the period                                    727         (824)       (2,072)

Exchange (loss) / gain on investment in
Joint Venture                                                    (51)            16            13
                                                              -------       -------     ---------
Total recognised gains / (losses) relating
to the period                                                     676         (808)       (2,059)
                                                                              =====         =====
Prior year adjustment (as explained in                          (732)
note 1)
                                                           ----------

TOTAL LOSSES RECOGNISED SINCE THE LAST
ANNUAL REPORT                                                    (56)
                                                               ======


STATEMENT OF HISTORICAL COST PROFITS AND LOSSES


Reported profit / (losses) on ordinary                            754       (1,493)       (2,643)
activities before taxation
Realisation of property revaluation gains                         444           ---           ---
of previous years
Difference between a historical cost
depreciation charge & the actual
depreciation charge of the year calculated
on the revalued amount                                            (4)           (5)          (10)
                                                             --------       -------      --------
Historical cost profit/(losses) on                              1,194       (1,498)       (2,653)
ordinary activities before taxation
                                                             --------       -------       -------

Historical cost profit/(losses) for the
year retained after taxation & dividends                          982         (969)       (2,699)
                                                            ---------       -------       -------




                                         UNAUDITED BALANCE SHEET
                                           as at 30 June 2002

                                                                                          Audited
                                                              30 June       30 June        31 Dec
                                                                 2002          2001          2001
                                                                        As restated   As restated
                                               Notes             £000          £000          £000
Fixed Assets
Tangible assets                                                12,376        12,937        16,088
Intangible asset - goodwill                                     4,206           135         4,332
Investment in Joint Venture
- goodwill                                                        124           148           136
- share of assets                                               2,250         2,075         2,569
- share of liabilities                                          (959)       (1,254)       (1,492)

                                                                1,415           969         1,213
Investment in own shares                                          368           249           250
                                                             --------      --------      --------
                                                               18,365        14,290        21,883

                                                                =====         =====         =====

Current Assets
Stocks                                             5            7,471         5,802         5,793
Debtors                                            6           17,375        10,755        16,659
Cash at bank and in hand                                            1           965            --
                                                             --------      --------      --------
                                                               24,847        17,522        22,452

Prepayments and accrued income                                    434            --           872

Creditors - amounts falling due within one
year                                               7         (24,837)      (12,409)      (26,315)
                                                             --------      --------      --------

Net Current Assets/(Liabilities)                                  444         5,113       (2,991)

                                                             --------      --------      --------

Total Assets Less Current Liabilities                          18,809        19,403        18,892

Creditors - amounts falling due after more
than one year                                       8         (10,798)      (10,195)      (11,372)
                                                 
Provision for liabilities and charges                              --         (842)            --

                                                             --------      --------      --------

Net Assets                                                      8,011         8,366         7,520

                                                                =====         =====         =====


Capital and Reserves
Share capital                                                   3,083         2,803         3,083
Share premium account                              9              844           242           844
Revaluation reserve                                9            1,318         1,762         1,762
Profit and loss account                            9            2,766         3,559         1,831

                                                             --------      --------      --------

Equity Shareholders' Funds                                      8,011         8,366         7,520

                                                                =====         =====         =====


                         UNAUDITED CASH FLOW STATEMENT
                      for the half year ended 30 June 2002


                                                                  Half            Half         Audited
                                                                  Year            Year            Year
                                                                 Ended           Ended           Ended
                                                               30 June         30 June          31 Dec
                                                                  2002            2001            2001
                                              Notes               £000            £000            £000

Cash (outflow)/inflow from operating
activities                                    10(a)            (1,984)           (166)           2,801
                                                                ------           -----         -------
                                              
Dividends from Joint Venture                                        --              --             456
                                                              --------        --------         -------
Return on investments and servicing of
finance
Interest received                                                    3              29              36
Interest paid                                                    (559)           (448)         (1,016)
                                                              --------        --------        --------
                                                                 (556)           (419)           (980)
                                                              --------        --------        --------
Taxation reimbursed/(paid)                                         458           (212)           (322)

                                                              --------        --------        --------

Capital expenditure and financial investment
Purchases of tangible fixed assets                               (504)           (552)         (1,187)

Sales of tangible fixed assets                                   3,430              32              40

Loan to ESOP trust                                               (118)            (28)            (28)

                                                              --------        --------        --------

                                                                 2,808           (548)         (1,175)

                                                             ---------        --------        --------

Acquisitions
Deferred consideration and fees                                  (740)              --           (476)
Net overdraft acquired with subsidiary
undertaking
                                                                    --              --         (3,449)
                                                            ----------         -------        --------

                                                                 (740)              --         (3,925)

Equity dividends paid                                             (33)              --           (471)
                                                              --------        --------        --------

Cash (outflow) before financing                                   (47)         (1,345)         (3,616)

                                                             ---------       ---------        --------

Financing
Repayment of loan from joint venture                                --             186             186
Repayment of loan notes issued on
acquisition of subsidiaries                                    (2,327)           (100)           (181)
                                                              
Capital element of finance lease rental
payments                                                         (293)           (193)           (455)
Repayment of long term loan                                      (625)              --           (312)
Bank term loan and other advances                                2,600              --              --
                                                               -------         -------         -------
                                                                 (645)           (107)           (762)
                                                               -------        --------        --------

(Decrease) in cash for the period             10(b)              (692)         (1,452)         (4,378)

                                                                 _____           _____           _____



                              HAVELOCK EUROPA PLC

                             NOTES TO THE STATEMENT


1.       The financial information contained in this statement for the half year
ended 30 June 2002 has been prepared on a basis consistent with the accounting
policies set out in the audited accounts for the year ended 31 December 2001,
with the exception of deferred tax which, in accordance with FRS 19, has been
incorporated on a full provision basis with prior period figures restated
accordingly.  The impact of providing for deferred tax on a full provision basis
is to reduce the net assets at 31 December 2001 by £732,000.  The impact on the
current period's results is to increase the tax charge by £438,000.  There is no
impact on the result for the equivalent period last year and the tax credit for
the full year to 31 December 2001 has been reduced by £454,000.

The figures for the financial year ended 31 December 2001 are extracted from the
statutory accounts for that year on which an unqualified report was made by the
Auditors and which have been delivered to the Registrar of Companies.  The
summarised results for the half-year to 30 June 2002 and the comparative results
for the half-year to 30 June 2001 are non-statutory accounts within the meaning
of section 240 of the Companies Act 1985.

2.       All operations are continuing.

3.       A charge for taxation has been included at 30% (2001:36%), being the
effective rate likely to be applied to the UK result, excluding the exceptional
gain, for the full year to 31 December 2002.  The results of the Middle East
joint venture are not subject to taxation.

4.       Earnings per share are calculated by dividing the profit after tax by
29,853,926 (2001: 27,443,429) being the average number of shares in issue during
the period, excluding those held by the employee share scheme, in accordance
with UITF 13. Diluted earnings per share are calculated by dividing the profit
after tax by 30,656,587 shares, which includes all share options with an option
price less than the average market price for the period.


Adjusted earnings attributable to ordinary shareholders

                                                       Half year        Half Year             Year
                                                           ended            ended            ended
                                                         30 June          30 June           31 Dec
                                                            2002             2001             2001
                                                            £000             £000             £000

                     Diluted earnings / (loss)               727            (824)          (2,072)
         Add additional tax charge following
                            adoption of FRS 19               438              ---              454
                                                       ---------         --------         --------
                             Adjusted earnings             1,165            (824)          (1,618)
                                                           =====            =====            =====

                 Basic weighted average shares            29,854           27,443           28,193

                                  Adjusted EPS              3.9p           (3.0p)           (5.7p)




5.         Stocks                                        30 June          30 June           31 Dec
                                                            2002             2001             2001
                                                            £000             £000             £000

            Raw material and consumables                   1,994            1,926            1,861
            Work in progress                               2,775            1,710            1,455
            Less: payments to account                        (1)             (26)               --
            Finished goods                                 2,703            2,192            2,477
                                                       ---------         --------         --------
                                                           7,471            5,802            5,793
                                                           =====            =====            =====

6.       Debtors
            Trade debtors                                 15,800            9,133           15,149
            Other debtors                                    868              744              566
            Prepayments                                      707              878              944
                                                        --------         --------         --------
                                                          17,375           10,755           16,659
                                                           =====            =====            =====
7.         Creditors: amounts falling due within one year


                                                         30 June          30 June           31 Dec
                                                            2002             2001             2001
                                                            £000             £000             £000

            Bank advances (secured)                        3,904               --            3,211
            Loan notes                                     2,781            1,144            3,144
            Trade creditors                                8,932            6,539            8,192
            Other taxes and social security                1,837             1008            2,112
            Accruals                                       3,076            2,835            2,657
            Provision for Nottingham closure                 856               --            3,500
            Dividends -       Final                          463              350              496
                        -           Interim                  185              140               --
            Obligations under finance leases                 303              393              503
            Provision for deferred                         2,500               --            2,500
               consideration
                                                        --------         --------         --------
                                                          24,837           12,409           26,315
                                                           =====            =====            =====

      The loan notes are repayable at par on the holder giving one month's notice.   The Company's
obligations under these notes are guaranteed by Bank of Scotland. In so far as the Hartcliffe
notes have not already been redeemed, they will be redeemed in full by the Company on 5 January
2003 at par.  In so far as the ESA McIntosh notes have not already been redeemed, they will be
redeemed in full by the Company on 31 December 2004 at par.


8.       Creditors: amounts falling due after more than one year

                                                   30 June         30 June          31 Dec
                                                      2002            2001            2001
                                                      £000            £000            £000

      Bank loans (secured)                          10,413          10,000           8,438
      Obligations under hire purchase
        contracts and finance leases
                                                       385             195             434
      Provision for deferred consideration              --              --           2,500
                                                  --------        --------        --------
                                                    10,798          10,195          11,372
                                                     =====           =====           =====

9.       Reserves
                                                     Share     Revaluation   Profit & Loss
                                                   Premium         Reserve         Account
                                                      £000            £000            £000
      At 31 December 2001 - as reported                844           1,762           2,563
      Prior year adjustment (see note 1)                --              --           (732)
                                                  --------         -------         -------
      At 1 January 2002 - as restated                  844           1,762           1,831
      Exchange loss on investment                        -               -            (51)
      Revalued asset sold                                            (444)             444
      Gain for the period                                -               -             542
                                                   -------         -------         -------
      At 30 June 2002                                  844           1,318           2,766
                                                      ====            ====            ====


10.   Cash Flow Statement                             Half            Half         Audited
                                                      Year            Year            Year
                                                     ended           Ended           Ended
                                                   30 June         30 June          31 Dec
                                                      2002            2001            2001
                                                      £000            £000            £000

a)Reconciliation of operating profit/(loss) to net cash flow from operating activities

      Operating profit/(loss) after 
        exceptional items                            1,050         (1,461)         (2,819)
      Depreciation and amortisation
        charges                                      1,264           1,049           2,252
      (Gain) on disposal of fixed tangible
        assets                                       (297)              --             (8)
      (Increase)/decrease in stocks                (1,678)           (968)             126
      (Increase)/ decrease in debtors                (764)           4,496           3,440
      (Decrease) in creditors                      (1,559)         (3,282)           (190)
                                                   -------         -------         -------
      Net cash (outflow)/inflow from
        operating activities                       (1,984)           (166)           2,801
                                                     _____           _____           _____

                                                   

b)   Reconciliation of net cash flow to movement in net debt

      (Decrease) in cash for the period             (692)         (1,452)        (4,378)
      Finance lease creditor acquired                  --              --          (318)
        with acquisition
      Finance lease payments                          293             193            455
      Inception of new finance leases                (44)              --          (293)
      Loan notes issued in the year               (1,965)              --        (2,080)
      Loan notes redeemed                           2,327             100            181
      Bank loan repaid                                625              --            312
      Bank term loan & other advances             (2,600)              --             --
                                                  -------         -------        -------
      Movement in net debt in the period          (2,056)         (1,159)        (6,121)

      Opening net debt                           (15,729)         (9,608)        (9,608)
                                                 --------        --------       --------
      Closing net debt                           (17,785)        (10,767)       (15,729)
                                                    =====           =====          =====

c)   Analysis of net funds
                                           At                          Other             At
                                    1 January             Cash      Non-Cash        30 June
                                         2002             Flow       Changes           2002
                                         £000             £000          £000           £000

      Overdraft                       (1,961)            (693)            --        (2,654)
      Cash at bank and in
        hand                               --                1            --              1
                                     --------          -------      --------        -------
                                     
                                      (1,961)            (692)            --        (2,653)
                                     --------          -------       -------        -------
Debt due within one year

      Bank loans                      (1,250)              625         (625)        (1,250)
      Loan notes                      (3,143)            2,327       (1,965)        (2,781)
      Finance lease creditor            (503)              293          (93)          (303)
                                      -------          -------       -------        -------
                                      (4,896)            3,245       (2,683)        (4,334)
                                      -------          -------       -------        -------

Debt due after one year

      Finance lease creditor            (434)               --            49          (385)
      Bank loans                      (8,438)          (2,600)           625       (10,413)
                                      -------          -------       -------        -------
                                      (8,872)          (2,600)           674       (10,798)
                                      -------          -------       -------        -------
      Total net debt                 (15,729)             (47)       (2,009)       (17,785)
                                        =====             ====          ====          =====



11.   The interim report for the half year ended 30 June 2002 was approved by
the Directors on 17 September 2002.


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