Havelock Europa PLC
24 June 2005
HAVELOCK EUROPA PLC
Group on target to deliver
further good progress in 2005
At this afternoon's AGM of Havelock Europa, the educational furniture and
supply, point of sale display and retail interiors group, the Chairman, Malcolm
Gourlay, made the following remarks with regard to current trading and
'Trading for the first six months of the year is expected to be in line with
budget, with a sound performance from Point of Sale Display, an improved
contribution from the Retail Interiors Division and a somewhat slower than
anticipated period for sales in the 'direct to schools' sector of education
Within the Point of Sale Display Division our investment programme continues. A
new high volume digital printing press is being installed at Hartcliffe, in
Bristol. This will confer significant advantages in the production of point of
sale ticketing, both for our customers and ourselves, in terms of speed and
collation, once it has been commissioned in the autumn.
In the Retail Interiors Division, the level of activity has been strong, despite
the reported slow down in the High Street. A particularly high level of
enquiries has been received from the financial services sector. The prospects
for this business are likely to continue to improve throughout this year as a
result of a successful diversification of the customer base and the recent entry
into the healthcare and accommodation services markets.
Whilst PFI sub-contractor business will show an improvement in overall activity
this year, ESA McIntosh, the UK market leader in science laboratories and fitted
furniture for schools, has started the year more slowly than expected. Despite a
brisk level of enquiries from Local Authorities and direct from schools, the
volume of actual orders to date has been slower than last year, in that sector
of the market. After a particularly slack period around the time of the General
and Local Elections, orders and enquiries have picked up sharply in the last few
weeks. We are confident that this improvement will continue.
TeacherBoards, which was acquired last June, has made a strong start to the year
with business for the first five months ahead of budget.
Clean Air, acquired last July, has had a more modest start to the year, stemming
largely from the slower than anticipated activity in the schools refurbishment
market, outlined before.
The Group has continued to strengthen its senior management team and, over the
next quarter, it is intended to consolidate further the synergies available
between education, healthcare and retail interiors, with a reapportionment of
responsibilities. This restructuring is expected to produce an optimal use of
the Group's assets as well as providing improved customer service and a launch
pad for the further significant growth expected over the next two years.
The Interim Results for 2005 will be the first financial statements prepared in
accordance with International Financial Reporting Standards. The key differences
between UKGAAP and IFRS were outlined in the 2004 annual report. The requirement
under IFRS to recognise revenue after installation will result in timing
differences in the recognition of revenue on education supply and fit contracts
and this will increase the seasonal bias towards the second half of the year.
The Board remains optimistic about the growth opportunities in the markets in
which it is active. The rate of progress towards financial close of a series of
PFI contracts, in the education and healthcare sectors, is now in line with
expectation following the adjustments made after the withdrawal of Jarvis from
the sector. The Board anticipates further overall progress in the full year,
with significant growth in 2006 and 2007 in the education and healthcare PFI
sectors. In addition, the Group will continue to study opportunities for
appropriate acquisitions in these two markets.'
Havelock Europa PLC 01383-820 044
Hew Balfour (Chief Executive)
Graham MacSporran (Finance Director)
Bankside Consultants Limited
Charles Ponsonby 020-7367 8851
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