Havelock Europa PLC
27 June 2006
Tuesday 27 June 2006
HAVELOCK EUROPA PLC
At this afternoon's AGM of Havelock Europa, the education and retail interiors
and point of sale display Group, the Chairman, Malcolm Gourlay, made the
following remarks with regard to current trading and prospects.
'Order input for the first six months of the year has been healthy in all
divisions and particularly in the Education and Retail Interiors Divisions. Many
of these orders are for delivery in the second half which is traditionally the
Group's peak period for activity.
ESA McIntosh, the UK market leader in fitted furniture and equipment for
schools, has experienced record levels of orders in its core 'direct to schools'
market and has achieved start dates in line with its expectation for business in
the PFI arena, with activity now underway in 14 of the 16 contracts scheduled
for commencement this year. The consolidation of the management teams
responsible for ESA McIntosh and Retail Interiors into a single operating board
has been completed and the benefits, in relation to manufacturing and
procurement efficiencies, are starting to come through.
Orders and enquiries in the Group's two classroom accessory businesses,
TeacherBoards and Clean Air, are also running ahead of last year.
Within the Retail Interiors Division, Marks & Spencer has returned as a
significant customer and activity in the financial services area has been
robust. Despite fears of a slow down in the High Street, the diversification of
the customer base within this division and the entry last year into the
healthcare market have created a wider spread of opportunity and some lowering
of exposure to retail volatility.
The Point of Sale Division has suffered the loss of a major customer, as a
result of the sale of Kwik Save by Somerfield, which has affected both the
business and the level of activity at the Group's printing subsidiary in
Bristol. Nevertheless, early action to consolidate this operation under the
management team of Showcard Print, headquartered in Letchworth, is beginning to
show benefits. An extensive redundancy programme has taken place which will
generate significant savings and this, together with the rationalisation of both
property and plant, will, in due course, help to mitigate the effect of the
reduction in revenue on profit. In Letchworth, both orders and sales are running
at a substantially higher level than last year as a result of the addition of a
number of new customers.
As pointed out on earlier occasions, the requirement under IFRS to recognise
revenue after completion of the installation process, particularly in the
education businesses, continues to weight the seasonal bias towards the second
half of the year, during which period almost all of the Group's profit will be
The Board remains enthusiastic about the markets in which it is operating. The
temporary hiatus in the PFI education sector, which followed the withdrawal of
Jarvis, in late 2004, is now over and there appear to be positive indications
from Government of continuing commitment towards the refurbishment and renewal
of education infrastructure well beyond 2008. The Board expects to make further
progress in the full year and anticipates continuing growth in 2007,
particularly in the education and healthcare sectors.
The Group remains interested in making further acquisitions in existing and
related markets, exhibiting long term growth.'
Havelock Europa PLC 01383-820 044
Hew Balfour (Chief Executive) 07801-683 851
Grant Findlay (Finance Director) 07768-745 960
Bankside Consultants Limited
Charles Ponsonby 020-7367 8851
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