Stronger order book gives Fife furniture maker confidence

Havelock Europa vows to share outcomes of strategic review

Fife furniture manufacturer Havelock Europa said it expected to hit full-year financial targets despite admitting it was difficult to predict how the second half of the year may turn out.

The group, which has its headquarters at John Smith Business Park in Kirkcaldy, told shareholders at its annual general meeting that last year had been one of progress for the firm despite the fact it was operating in a “very competitive market”.

In April, the group returned to the black after reporting an operating profit after exceptional costs of £357,000 for 2016.

However, at £60.8 million, revenue in the period was lower than in 2015 due to the loss of the large part of a multimillion-pound financial services contract.

In his address to investors, chairman Ian Godden said the company had reached a number of milestones recently with the launch of a new early years furniture range and the securing of a major new contract to design and supply furniture for a building society.

Mr Godden, who joined Havelock at the tail end of last year and who has invested heavily in the business, said the group’s earnings this year would be weighted “more than usually” towards the second half of the year.

He said activity within the group’s

“We have been appointed exclusively by a major UK building society to design and deliver new-style furniture.

IAN GODDEN

public sector business unit was expected to be below 2016 levels but the shortfall was likely to be balanced by a better than expected performance from the group’s retail and lifestyle and corporate services functions.

Mr Godden told shareholders the results of a major strategic review designed to “re-establish market leadership” for Havelock, would be shared later in the year.

Meantime, he said the company remained focused on cost controls and improving margins and cash flow through a combination of operational performance, a strengthened commercial team and pursuing further efficiencies across the group.

“Forecasting for the second half year remains difficult – however, given the current order book of £38m and existing and new framework agreements, the board believes performance for the full year will remain in line with our expectations,” Mr Godden told the meeting.

“The recent launch of our new Early Years’ education and healthcare furniture ranges have been well received by the market and we are now in the process of updating our Secondary School range, which all augur well for the future. The pipeline in the retail and lifestyle and corporate services sectors is encouraging.

“We have been appointed exclusively by a major UK building society to design and deliver new-style furniture for their branch refurbishment programme, have secured new retail customers both in the UK and internationally, and have undertaken our first projects in the car showroom sector.”

All resolutions raised at Havelock’s AGM were duly passed on a vote.

Shares in the firm closed down 4.95% at 12 pence following the trading session.

Picture: Kim Cessford. Havelock Europa’s headquarters at Kirkcaldy.