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Havelock Europa PLC (HVE)

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Tuesday 06 February, 2007

Havelock Europa PLC

Acquisition and Placing

Havelock Europa PLC
06 February 2007


6 February 2007

                              Havelock Europa PLC

                            Acquisition and Placing


Havelock Europa PLC, the Educational, Financial and Retail Interiors and Point
of Sale Display Group, announces the acquisition of Stage Systems Limited, an
educational furniture manufacturer, for a maximum consideration of £3.45
million.


The consideration will be satisfied as to £3.2 million in cash via a Vendor
Placing of 2,091,504 Vendor Placing Shares, which have been placed by Investec
with institutional and other investors at 153 pence per share, and the balance
of £0.25 million by the issue of 159,236 Consideration Shares to the Vendors.


Havelock also announces a cash placing of 1,108,496 Cash Placing Shares at a
price of 153 pence per share to raise approximately £1.7 million before expenses
for the Company.


All definitions in this announcement are set out at the end of the appendix to
this announcement.


Acquisition highlights


• Stage Systems provides an innovative range of demountable staging
    products for schools and is well known within its markets. Stage 

•  Systems is in the early stages of developing a range of postural furniture 
   for schools, which will complement the Group's existing offering of fixed and 
   fitted furniture. 

•  The directors of Havelock perceive 'loose furniture' as an opportunity for 
   additional growth within support services for the Education
   sector. 

•  Cross-selling opportunities are expected to be created by the introduction of 
   Stage Systems' customers in the primary school market to Havelock's other 
   educational businesses and by the opportunity to add Stage Systems' product 
   portfolio to the Group's current PFI offering. 

•  The  Acquisition fits neatly with Havelock's strategy of focusing on higher
   growth and more profitable businesses. The Acquisition is expected to be
   earnings enhancing in the current year, excluding the impact of amortisation
   of intangible assets acquired.


    Hew Balfour, Chief Executive of Havelock Europa PLC, commented:


    'Stage Systems is a design-led business focused on the educational supplies
    market. With its strength in the primary schools market, Stage Systems will
    complement our strategic position in the secondary schools sector. The move
    into the primary schools market is significant in the context of the
    Chancellor's recent pre-Budget report which confirmed the Government's
    commitment to capital investment in education but with special emphasis on
    primary schools.'


    Enquiries:
    Havelock Europa PLC                                            01383 820 044
    Hew Balfour (Chief Executive)                                  07801 683 851
    Grant Findlay (Finance Director)                               07768 745 960

    Investec Bank (UK) Limited
    James Grace                                                    0207 597 5970
    Rupert Krefting
    Martin Smith

    Bankside Consultants Limited
    Charles Ponsonby                                               0207 367 8851
                                                                   07789 202 312



    Introduction


    Havelock, the Educational, Financial and Retail Interiors and Point of Sale
    Display Group, announces the acquisition of Stage Systems Limited from the
    Vendors for a maximum consideration of £3.45 million.


    The consideration will be satisfied as to £3.2 million in cash via a Vendor
    Placing of 2,091,504 Vendor Placing Shares, which have been placed by
    Investec with institutional and other investors at 153 pence per share, and
    the balance of £0.25 million by the issue of 159,236 Consideration Shares to
    the Vendors at 157 pence per share.


    Havelock also announces a cash placing of 1,108,496 Cash Placing Shares at a
    price of 153 pence per share to raise approximately £1.7 million before
    expenses.


    The net proceeds of the Cash Placing will be used to finance planned capital
    expenditure in order to meet growing demand, to deliver further operating
    efficiencies at Havelock's three main manufacturing sites and to meet the
    costs of the Placing. The Placing has been fully underwritten by Investec.


    Information on Stage Systems


    Stage Systems Limited is privately owned and its wholly-owned subsidiary,
    Anthony Hill Designs Limited, which trades as Stage Systems, is a business
    based in Loughborough, Leicestershire. It supplies an innovative range of
    demountable staging products, primarily to schools and other educational
    establishments. The products are used for drama productions and other
    events. The products are particularly suitable for primary schools as they
    are of light weight but robust construction, and do not need specialist
    installation teams to assemble.


    Stage Systems is also in the early stages of developing a range of
    educational furniture specifically designed to cater for the postural health
    of pupils. This is an area of increasing interest among educational
    providers and recently issued European Union guidelines are likely to
    increase focus on this segment of the market. Stage Systems' products are
    innovative and are the subject of a number of patent applications.


    Stage Systems' audited accounts for the year ended 31 March 2006 showed
    turnover of £4.1 million and profit on ordinary activities before taxation
    of £0.3 million. Gross assets and net assets after adjusting for a freehold
    property which is to be retained by the Vendors as at 31 March 2006 were
    £1.8 million and £1.3 million respectively, including approximately £0.6
    million in cash.


    Acquisition Rationale


    The Acquisition is a key element in Havelock's strategy to expand the range
    of educational furniture and supplies that it offers to customers,
    particularly in the demountable and 'loose furniture' sector. Havelock
    perceives 'loose furniture' as an opportunity for additional growth outside
    its market-leading position in fixed and fitted furniture for school
    laboratories and other types of specialist classroom.


    Although ESA McIntosh, Havelock's principal education business, already
    supplies staging and seating within its existing PFI contracts, the
    Acquisition will add a significant brand identity in this market and, given
    its important position and customer base in the primary school market, is
    expected to provide new customer contacts for Havelock's other education
    businesses.


    A particular attraction of Stage Systems is its reputation for innovation.
    Anthony Hill, the managing director of Stage Systems and one of the Vendors,
    will move from that role to a newly-created role of development director at
    Stage Systems, continuing to drive the creation of an innovative educational
    furniture product family.


    The Group has recruited a new managing director for Stage Systems, who will
    report to Ken Munro, managing director of ESA McIntosh.


    The directors of Havelock expect that the Acquisition will be earnings
    enhancing in the current financial year, excluding the impact of
    amortisation of intangible assets acquired.


    Acquisition Agreement


    Havelock has agreed, pursuant to the terms of acquisition agreements dated 6
    February 2007 between Havelock and the Vendors, to acquire Stage Systems
    Limited from the Vendors for a maximum consideration of £3.45 million.


    £170,000 of the consideration will be held in a retention account on
    completion of the Acquisition until August 2007. This will be released to
    the Vendors subject to the terms of the Acquisition Agreement unless
    required to satisfy warranty claims. The consideration will also be subject
    to a downwards only adjustment to the extent that, on completion of the
    Acquisition, the net current asset value of the Target Group is less than
    £1,150,000 or the net asset value of the Target Group is less than
    £1,530,000.


    The Acquisition is conditional upon, amongst other things, (i) the Placing
    having become unconditional (save for any conditions relating to completion
    of the Acquisition or Admission) and not having been terminated in
    accordance with its terms and (ii) Admission having become effective. It is
    expected that, subject to satisfaction of the conditions, the Acquisition
    will be completed on 12 February 2007.


    Placing


    Havelock is raising approximately £3.2 million by way of the Vendor Placing,
    the proceeds of which will be payable to the Vendors, and approximately £1.7
    million by way of the Cash Placing, the proceeds of which will be payable to
    Havelock, both at the Placing Price. The expenses of the Placing of
    approximately £0.3 million will be paid from the proceeds of the Cash
    Placing.


    The Consideration Shares, the Vendor Placing Shares and the Cash Placing
    Shares represent approximately 0.5 per cent., 6.0 per cent., and 3.2 per
    cent., respectively, of the Company's existing issued share capital. In
    aggregate, they will represent approximately 9.6 per cent. of the Company's
    existing issued ordinary share capital. Investec proposes to place the
    Vendor Placing Shares and the Cash Placing Shares with institutional and
    other investors. The Placing has been fully underwritten by Investec
    pursuant to the terms of the Placing Agreement.


    The Placing is conditional on, amongst other things, the Acquisition
    Agreement remaining in full force and effect and becoming unconditional in
    all respects (save for the Admission condition) and being completed in
    accordance with its terms, the Placing Agreement not being terminated in
    accordance with its terms and Admission occurring no later than 12 February
    2007 (or such later date as may be agreed, being no later than 19 February
    2007).


    The Placing Price represents a discount of 4.97 per cent. to the Closing
    Price of an Ordinary Share on 5 February 2007 of 161 pence.


    The Consideration Shares, the Vendor Placing Shares and the Cash Placing
    Shares will rank pari passu in all respects with the Company's existing
    Ordinary Shares.


    Members of the public are not eligible to take part in the Placing. The
    Placing is only being made to persons falling within articles 19(5) or 49(2)
    of the Financial Services and Markets Act 2000 (Financial Promotion) Order
    2005 (as amended) (the 'FPO') who are also qualified investors for the
    purposes of section 86(7) of the Financial Services and Markets Act 2000 and
    no other person may participate in the Placing or rely on any communication
    relating to it.



Admission, Settlement and Dealings

Applications have been made to the UK Listing Authority and to the London Stock
Exchange for the Vendor Placing  Shares, the Cash Placing Shares and the
Consideration Shares to be admitted to listing and trading, respectively.  It 
is expected that Admission will occur and that dealings will commence on 12
February 2007 at which time it is also  expected that the Vendor Placing Shares,
the Cash Placing Shares and Consideration Shares will be enabled for  settlement
in CREST. Immediately following Admission, the Company will have 38,218,393
Ordinary Shares issued and fully  paid.

Investec Investment Banking, a division of Investec, which is authorised and
regulated by the Financial Services  Authority and is a member of the London
Stock Exchange, is acting exclusively for Havelock in connection with the 
Placing and is not acting for any other person and will not be responsible to
any person other than Havelock for  providing the protections afforded to its
customers or for providing advice on the transactions or arrangements  referred
to in this announcement.

Outlook

As outlined in the Company's trading update on 9 January 2007, Havelock remains
on track with its plan to develop  its higher growth and more profitable
businesses, particularly those serving the Education, Healthcare and Financial 
Services sectors, and views 2007 with enthusiasm.



Appendix

Terms and conditions of, and Important Information relating to, the Placing

If a Placee chooses to participate in the Placing by making an offer to   
acquire New Ordinary Shares, it will be deemed to have read and understood   
this Appendix in its entirety and to be making such offer on the terms and   
conditions, and to be providing the representations, warranties and   
acknowledgements, contained in this Appendix.

The Placing and the terms and conditions herein are directed exclusively at
investment professionals (within Article 19(5) of the Financial Service and
Markets Act 2000 (Financial Promotion) Order 2005 (as amended) ('FPO')) and high
net worth companies, unincorporated associations etc (within Article 49(2) of
the FPO) who are also qualified investors for the purposes of section 86(7) of
the Financial Services and Markets Act 2000 ('FSMA'). Such persons are together
referred to as 'Relevant Persons.' No person other than Relevant Persons
contacted by Investec may participate in the Placing or rely on any
communication relating to it. Accordingly, this announcement is exempt from the
general restriction set out in section 21 of FSMA on the communication of
invitations or inducements to engage in investment activity and has not been
approved by a person who is an authorised person under the FSMA.

Members of the public are not entitled to take part in the Placing and this
announcement is communicated to them for the purposes of information only. This
announcement and the terms and conditions herein must not be relied on, acted on
or responded to by persons who are not Relevant Persons.

This announcement and this Appendix do not constitute an offer to sell or issue
or solicitation of an offer to buy or subscribe for New Ordinary Shares in any
jurisdiction, including, without limitation, the United Kingdom, the United
States, Canada, Australia, Japan and the Republic of Ireland. This announcement
and the information contained herein are not for publication or distribution,
directly or indirectly, to persons in the United States, Canada, Australia,
Japan, the Republic of Ireland or in any jurisdiction in which such publication
or distribution is unlawful. The New Ordinary Shares referred to in this
announcement have not been and will not be registered under the US Securities
Act of 1933 (the 'Securities Act') and may not be offered or sold within the
United States absent registration or an exemption from registration. The New
Ordinary Shares are to be offered and sold outside the United States in
accordance with Regulation S under the Securities Act.

The distribution of this announcement and the placing and/or issue of the New
Ordinary Shares in certain jurisdictions may be restricted by law. Persons to
whose attention this announcement has been drawn are required by the Company and
Investec to inform themselves about and to observe any such restrictions.

Any acquisition or application for New Ordinary Shares by Placees should only be
made on the basis of information contained in this announcement and this
Appendix.


The Placing

Under the Placing Agreement, Investec has, on behalf of the Company,
conditionally agreed with the Company to seek to procure Placees to accept the
issue and allotment of New Ordinary Shares at the Placing Price on the terms of
the Placing Agreement and the terms and conditions set out in this Appendix. The
Placing will raise approximately £4.9 million (or approximately £4.6 million net
of expenses).

Application has been made for the admission of the New Ordinary Shares and the
Consideration Shares to the Official List maintained by the Financial Services
Authority and for the admission of such shares to trading on the London Stock
Exchange's main market. It is expected that Admission will occur and that
dealings will commence on 12 February 2007 at which time it is also expected
that the New Ordinary Shares and the Consideration Shares will be enabled for
settlement in CREST.

Prospective Placees will be contacted by Investec to invite them to submit an
application for allotment of New Ordinary Shares. If a bid is successful, the
Placee's allocation will be confirmed to it orally following the close of the
Placing process, and a conditional contract note will be dispatched as soon as
possible thereafter. Investec's oral confirmation to the Placee after the
Placing process has closed will constitute a legally binding commitment upon the
Placee to accept the issue and allotment of the number of New Ordinary Shares
allocated to it on the terms and conditions set out in this Appendix. Investec
is arranging the Placing as an agent of the Company. Participation will only be
available to persons invited to participate by Investec.

Terms of the Placing Agreement

Pursuant to the Placing Agreement, Investec has agreed as agent for the Company
to seek to procure Placees to accept the issue and allotment of the New Ordinary
Shares on the terms of the Placing Agreement and the terms and conditions set
out in this Appendix at the Placing Price. In the event that Investec is not
able to procure Placees for the New Ordinary Shares, Investec shall itself as
principal accept the issue and allotment of any remaining New Ordinary Shares at
the Placing Price.

The Placing is conditional upon, inter alia, the Acquisition Agreement remaining
in full force and effect, having become unconditional (save only as to
Admission) and having been completed on Admission in accordance with its terms,
Admission having become effective and on the Placing Agreement having become
unconditional and not having been terminated in accordance with its terms prior
to Admission. If the conditions of the Placing Agreement are not fulfilled or
waived on or before 8.00 am on 12 February 2007 (or such later time and date as
Investec may permit, being no later than 8.00 am on 19 February 2007) the
Placing will not become unconditional and the placing monies will be returned to
the Placees, without interest, as soon as practicable thereafter.

In consideration of its services in connection with the Placing, the Company
will pay to Investec, a commission of 4.5 per cent. of the aggregate value, at
the Placing Price, of the New Ordinary Shares. The Placing Agreement contains
warranties given by the Company with respect to the Group, its business and
certain matters connected with the Placing. In addition, the Company has given
an indemnity to Investec, any holding company of Investec and any subsidiary
undertaking of Investec or any such holding company and all of their respective
directors, officers and employees in respect of, amongst other things, the
performance by Investec of its services in connection with the Placing and the
application by Investec, on behalf of the Company, for Admission.

Investec is entitled to terminate the Placing Agreement in certain circumstances
prior to Admission, including:

(i) if it should come to the notice of Investec that any statement contained in
this Announcement is untrue or incorrect or misleading in any respect which
Investec considers to be material in the context of the Placing and Admission or
that matters have arisen which would, if the Announcement were issued at that
time, constitute an omission therefrom which Investec (in each case acting
reasonably and if practicable after consultation with the Company) considers to
be material in the context of the Placing and Admission; or

(ii) if it should come to the knowledge of Investec that a matter has arisen
which might give rise to a claim under the indemnities in the Placing Agreement
or that any of the warranties in the Placing Agreement was untrue or inaccurate
or misleading in any respect which in any such case Investec (acting reasonably
and if practicable after consultation with the Company) considers material in
the context of the Placing and Admission when made and/or that any of the
Warranties has ceased or will as at the date of Admission cease to be true or
accurate or has become misleading in any material respect which Investec
considers material in the context of the Placing and Admission; or

(iii) if the Company fails in any material respect to comply with any of its
obligations under the Agreement;

(iv) if at any time prior to Admission there should occur any change in national
or international financial, industrial, economic, political or market conditions
or come into effect any government regulation which, in the opinion of Investec
acting reasonably, is likely materially and adversely to affect the financial
position, the business or the prospects of the Company, or in the reasonable
opinion of Investec, renders the Placing or the creation of a market in the
Placing Shares temporarily or permanently impracticable or inadvisable.

The exercise by Investec of any right of termination under the Placing Agreement
shall be within its absolute discretion. Investec shall not have any liability
to any Placee, or any other person for whom any Placee is subscribing New
Ordinary Shares, in respect of any decision which it may make as to whether or
not to exercise any right of termination or any of its other rights under the
Placing Agreement.

General

These terms and conditions apply to persons applying for an allotment of New
Ordinary Shares under the Placing. Each person to whom these conditions apply,
as described above, who confirms his application for allotment to Investec
(which may include Investec and/or its nominee(s)) hereby agrees with each of
Investec and the Company to be bound by these terms and conditions as being the
terms and conditions on which the New Ordinary Shares will be issued under the
Placing. A Placee shall, without limitation, become so bound if Investec
confirms to it (i) the Placing Price and (ii) its allocation (the
'Confirmation'), being the number of New Ordinary Shares in respect of which
such Confirmation is given or such lesser number of New Ordinary Shares as
Investec shall specify and of which Investec shall notify the Company's
registrar on behalf of the Company, conditional on these terms and conditions
and this announcement.

Conditional, inter alia, on (i) Admission occurring on 12 February 2007 or such
later date as Investec may permit (not being later than 19 February 2007) and
(ii) the Confirmation, each Placee agrees to accept the issue and allotment to
it of such number of New Ordinary Shares as is specified in its Confirmation (or
such lesser number as Investec shall specify) at the Placing Price. To the
fullest extent permitted by law, each Placee acknowledges and agrees that it
will not be entitled to exercise any remedy of rescission at any time. This does
not affect any other rights a Placee may have. A conditional contract note will
be dispatched as soon as possible following the Confirmation.

Each Placee undertakes to pay the Placing Price for the New Ordinary Shares
issued to such Placee in such manner as shall be directed by Investec. Liability
for stamp duty and stamp duty reserve tax is described below. In the event of
failure by any Placee to pay as so directed, (without prejudice to Investec's
rights against such Placee) the relevant Placee shall be deemed hereby to have
appointed Investec or any nominee of Investec to sell (in one or more
transactions) any or all of the New Ordinary Shares in respect of which payment
shall not have been made as directed by Investec.

This announcement is the sole responsibility of the Company. Investec is acting
for the Company in connection with the Placing and is not providing advice to
any other person in relation to the Placing. Investec shall not be responsible
to any person other than the Company for providing the protections afforded to
the customers of Investec nor for advising any person other than the Company on
the transactions and arrangements referred to in this document.

No offering document or prospectus has been or will be submitted to be approved
by the Financial Services Authority in relation to the Placing and Placees'
commitments will be made solely on the basis of the information contained in
this announcement. Each Placee, by accepting a participation in the Placing,
agrees that the content of this announcement has been prepared by and is
exclusively the responsibility of the Company and confirms that it has neither
received nor relied on any other information, representation, warranty or
statement made by or on behalf of Investec or the Company and neither Investec
nor the Company will be liable for any Placee's decision to accept this
invitation to participate in the Placing based on any other information,
representation, warranty or statement which the Placee may have obtained or
received. Each Placee acknowledges and agrees that it has relied on its own
investigation of the business, financial or other position of the Company in
deciding to participate in the Placing. Nothing in this paragraph shall exclude
the liability of any person for fraudulent misrepresentation.

By participating in the Placing, each Placee irrevocably represents, warrants
and undertakes to Investec (for itself and as agent of the Company) that:

(a) it has read this announcement, including this Appendix;

(b) it and/or each person on whose behalf it is participating (in whole or in
part) in the Placing or to whom it allocates New Ordinary Shares in whole or in
part:

(i) has the capacity and authority and is entitled to enter into and perform its
obligations as a person to whom New Ordinary Shares are issued and allotted and
will honour such obligations; and

(ii) has fully observed all laws of relevant jurisdictions and obtained all
necessary governmental or other consents in either case which may be required in
relation to the issue and allotment to it of New Ordinary Shares;

(c) it is not a person who is resident in, or a citizen of, the United States,
Canada, Australia, Japan or the Republic of Ireland (or an agent or nominee of
such a person) or a corporation, partnership or other entity organised under the
laws of any such jurisdiction (or an agent or nominee of such a person);

(d) it is a Relevant Person;

(e) in agreeing to accept the issue and allotment of New Ordinary Shares it has
received and read this announcement including this Appendix and is not relying
on any information, representation or warranty relating to the Placing, the New
Ordinary Shares or the Company other than as contained in this document and it
has not relied on and is not relying on any representation or warranty or
agreement by Investec or the Company or any of their respective directors,
employees or agents or any other person except as set out in the express terms
herein;

(f) save where Investec has agreed in writing to the contrary, in participating
in the Placing it is acting as principal and for no other person and that its
acceptance of that participation will not give any other person a contractual
right to require the issue by the Company of any of the New Ordinary Shares;

(g) it irrevocably confirms Investec's discretion with regard to the Placing
Agreement and agrees that Investec does not owe it any fiduciary duties in
respect of any claim it may have relating to the Placing;

(h) it acknowledges that the New Ordinary Shares have not been and will not be
registered under the Securities Act or under the securities laws of any State of
the United States, that the relevant clearances have not been and will not be
obtained from the Securities Commission of any province of Canada and that the
New Ordinary Shares have not been and will not be registered under the
securities laws of Australia, the Republic of Ireland or Japan and, therefore,
the New Ordinary Shares may not, subject to certain exceptions, be directly or
indirectly offered or sold in the United States, Canada, Australia, the Republic
of Ireland or Japan;

(i) it acknowledges and agrees that neither it nor any affiliate, nor any person
acting on its or any affiliate's behalf, has or will offer, sell, take up,
renounce, transfer or deliver directly or indirectly any New Ordinary Shares
within the United States, Canada, Australia, the Republic of Ireland or Japan or
offer, sell, take up, renounce, transfer or deliver in favour of a resident of
the United States, Canada, Australia, the Republic of Ireland or Japan;

(j) it has not offered or sold and will not offer or sell any New Ordinary
Shares in the United Kingdom except in circumstances which have not resulted and
will not result in an obligation to publish an approved prospectus arising under
section 85(1) of the FSMA or a breach of such section;

(k) it has complied with all relevant laws of all territories, or obtained all
requisite governmental or other consents which may be required in connection
with its participation in the Placing; that it has complied with all requisite
formalities and that it has not taken any action or omitted to take any action
which will or may result in Investec, the Company or any of their respective
directors, officers, agents, employees or advisers acting in breach of the legal
and regulatory requirements of any territory in connection with the Placing or
its application; that it is not in a territory in which it is unlawful to make
an offer to subscribe for New Ordinary Shares; and that it will pay any issue or
other taxes due under any relevant laws having effect outside of the United
Kingdom;

(l) it acknowledges and agrees in connection with its participation in the
Placing that Investec is not acting for it in relation to the Placing or
otherwise and that Investec will not have any duties or responsibilities to it
for providing the protections afforded to its customers or for advising it with
regard to the Placing or the New Ordinary Shares, nor do the contents of this
announcement constitute the giving of investment advice by Investec to it and
nor does it expect Investec to have a duty to it similar or comparable to the
'best execution', 'suitability' and 'risk warnings' rules of The Financial
Services Authority;

(m) it has obtained all necessary consents and authorities to enable it to give
its commitment to accept the issue and allotment to it of New Ordinary Shares
and to perform its obligations as set out herein;

(n) save where Investec has been given prior written notice to the contrary, it
is not a person falling within subsections (6), (7) or (8) of sections 67 or 70
or subsections (2) and (3) of section 93 or subsection (1) of section 96 of the
Finance Act 1986 (or an agent or nominee of such person);

(o) save where Investec has been given prior written notice to the contrary, the
issue and allotment of New Ordinary Shares to it (whether as principal, agent or
nominee) will not be subject to stamp duty or stamp duty reserve tax at the
increased rates referred to in sections 67 or 93 (Depositary Receipts) or
sections 70 or 96 (Clearance Services) of the Finance Act 1986;

(p) in the case of a person who confirms to Investec on behalf of a Placee an
agreement to accept the issue and allotment of New Ordinary Shares and/or who
authorises Investec to notify the Placee's name to the Company's registrar, that
person represents and warrants that he has authority to do all such acts on
behalf of the Placee;

(q) to the extent that a Placee is accepting the issue and allotment of New
Ordinary Shares on behalf of a third party, prior written agreement of such
matter has been given by Investec as contemplated by paragraph (f) of this
Appendix:

(r) such Placee has carried out applicable procedures to verify the identity of
such third party for the purposes of the Money Laundering Regulations 2003 (the
'Regulations');

(s) such Placee has complied fully with its obligations pursuant to the
Regulations; and

(t) such Placee will provide Investec on demand with any information it might
require for the purposes of verification under the Regulations;

(u) it is aware of, has complied with and will comply with its obligations in
connection with money laundering under the Proceeds of Crime Act 2002 and
insider dealing under the Criminal Justice Act 1993;

(v) it acknowledges that the issue and allotment of the New Ordinary Shares to
it will be issued subject to the terms and conditions set out herein;

(w) acknowledges that no offering document or prospectus has been prepared in
connection with the Placing;

(x) acknowledges that the content of this announcement is exclusively the
responsibility of the Company and that neither Investec nor any person acting on
their behalf is responsible for or shall have any liability for any information,
representation or statement relating to the Company contained in this
announcement or any information previously published by or on behalf of the
Company and will not be liable for any Placee's decision to participate in the
Placing based on any information, representation or statement contained in this
announcement or otherwise; and

(y) represents and warrants that it has not received a prospectus or other
offering document and has not relied on any information other than information
contained in this announcement or any information previously published by or on
behalf of the Company and acknowledges and agrees that it has relied on its own
investigation of the business, financial or other position of the Company in
deciding to participate in the Placing.

In the event that a Placee is not able to give the warranties and undertakings
in (n) and (o) above, stamp duty or stamp duty reserve tax may be chargeable or
may be chargeable at a higher rate. Neither Investec nor the Company will be
responsible for any resulting liability to stamp duty or stamp duty reserve tax,
which shall be for the account of the Placee and in respect of which the Placee
agrees to indemnify, and keep indemnified, Investec and the Company.

Each Placee irrevocably appoints any duly authorised officer of Investec as its
agent for the purpose of executing and delivering to the Company and/or its
registrars any documents on its behalf necessary to enable it to be registered
as the holder of any of the New Ordinary Shares issued and allotted to it.

Settlement of the transactions in the New Ordinary Shares following Admission
will take place within the CREST system against Investec's CREST account 331.

In the case of a joint agreement to subscribe for New Ordinary Shares,
references to a 'Placee' in this Appendix are to each Placee who is a party to
such agreement and each such Placee's liability is joint and several.

These terms and conditions will be governed by and construed in accordance with
English law. For the exclusive benefit of Investec and the Company, each Placee
irrevocably submits to the exclusive jurisdiction of the English courts in
respect of these matters. This does not prevent an action being taken against
the Placee in another jurisdiction.




In this Announcement (including the Appendix), the following expressions have
the following meanings unless inconsistent with the context:



'Acquisition'  the proposed acquisition of Stage Systems Limited for a maximum
               consideration of £3.45 million pursuant to the Acquisition
               Agreement
'Acquisition   the agreements dated 6 February 2007 between the Vendors and the
Agreement'     Company providing for the sale and purchase of the entire issued
               share capital of the Target
'Admission'    the admission of the New Ordinary Shares and the Consideration
               Shares to the Official List by the making of an announcement in
               accordance with paragraph 3.2.7 of the Listing Rules and the
               admission of such shares to trading on the London Stock
               Exchange's main market in accordance with paragraph 2.1 of the
               Admission and Disclosure Standards
'Admission and the admission and disclosure standards published by the London
Disclosure     Stock Exchange from time to time
Standards'
'Cash Placing' the conditional placing of the Cash Placing Shares at the Placing
               Price to raise approximately £1.7 million before expenses for the
               Company
'Cash Placing  1,108,496 new Ordinary Shares
Shares'
'Closing       the closing middle market quotation of an Ordinary Share as
Price'         derived from the daily official list published by the London
               Stock Exchange
'Company' or   Havelock Europa PLC (registered number 782546), whose registered
'Havelock'     office is at 3 Swanwick Court, Alfreton, Derbyshire, DE55 7AS
'Consideration the issue of 159,236 new Ordinary Shares to the Vendors pursuant
Shares'        to the Acquisition Agreement
'CREST'        the computer based system and procedures which enable title to
               securities to be evidenced and transferred without a written
               instrument and which is operated by CRESTCo
'Group'        the Company and its subsidiaries at the date hereof and 'member
               of the Group' shall be construed accordingly
'Investec'     Investec Bank (UK) Limited (registered number 489604), whose
               registered office is at 2 Gresham Street, London EC2V 7QP
'Listing       the listing rules made by the Financial Services Authority under
Rules'         section 74 of FSMA and in force as at the date of the Placing
               Agreement
'London Stock  London Stock Exchange plc
Exchange'
'New Ordinary  the Vendor Placing Shares and the Cash Placing Shares
Shares'
'Official      the official list maintained by the Financial Services Authority
List'
'Ordinary      ordinary shares of 10p each in the capital of the Company
Shares'
'Placees'      persons who are procured by Investec to have New Ordinary Shares
               allotted and issued to them pursuant to the provisions of the
               Placing Agreement
'Placing'      the Vendor Placing and the Cash Placing
'Placing       the agreement dated 6 February 2007 between the Company and
Agreement'     Investec
'Placing       153 pence per Ordinary Share
Price'
'Stage         Anthony Hill Designs Limited (registered number 882644)
Systems'
'Target' or    Stage Systems Limited (registered number 5981825)
'Stage Systems
Limited'
'Target Group' the Target and each of its subsidiaries
'Vendors'      Anthony Edwin Hill, Jayne Margaret Elizabeth Hill and, in their
               capacity as trustees of The Hill No 1 Settlement Trust and The
               Hill No 2 Settlement Trust, Anthony Edwin Hill and Jayne Margaret
               Elizabeth Hill
'Vendor        the conditional placing of the Vendor Placing Shares at the
Placing'       Placing Price to realise cash proceeds to be paid to the Vendors
               pursuant to the Acquisition Agreement of approximately £3.2
               million
'Vendor        2,091,504 new Ordinary Shares
Placing
Shares'
'Warranties'   the warranties referred to in clause 10 and contained in Schedule
               1 of the Placing Agreement




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