The Courier & Advertiser (Fife Edition)
Havelock seeks urgent funding to continue as going concern.
Havelock Europa employs around 300 staff in Kirkcaldy
Major Fife employer Havelock Europa warned it was seeking urgent funding to carry on as a going concern yesterday.
The Kirkcaldy company, which produces furniture and fittings for shops and public buildings, employs around 300 staff from its headquarters at John Smith Business Park.
Shares in the AIM-listed firm were suspended after the bombshell announcement yesterday morning.
The company secured £8 million in funding in February but last month flagged a potential uncertainty over its ability to continue as a going concern.
The firm said yesterday its trading conditions had further deteriorated.
The statement said: “Since then, the company has experienced an unexpected increasing credit squeeze from its suppliers, as a result of which it has substantially utilised its available facilities following the re-financing announced on February 20.
“The board announces that it has been in discussions with existing funders and investors in the company regarding the provision of further funding, however it became apparent yesterday evening that these were unlikely to result in a positive outcome.
“The company needs further financing for its immediate working capital needs hence the board is obliged
The company needs further financing for its immediate working capital needs. HAVELOCK EUROPA STATEMENT
to consider steps to protect the position of creditors and is in discussions with potentially interested parties in this regard.
“The company’s ordinary shares will therefore be suspended from trading on AIM with immediate effect pending clarification of its financial position.”
GMB Scotland, which represents around 90 of the firm’s workers, described the firm’s predicament as “critical”.
A GMB spokesperson said: “The immediate priority is to find a new buyer or investment that can sustain our members’ employment in Kirkcaldy.”
Havelock Europa, based at John Smith Business Park, plunged into the red last year after one of the worst trading performances in its long history.
Chairman Ian Godden – who took the top job after making a substantial investment in the business in January 2017 – said the past year had proved to be “much more challenging” than expected as the company reported a £5.92 million pre-tax loss for the year to December 31. The figure compares to a slim £22,000 profit in 2016 and came as sales slid from £60.8m to £53.19m.
In his chairman’s statement with the accounts, Mr Godden said the firm faced multiple issues. “2017 was one of the worst performances in Havelock’s history, being impacted by a lower opening order book brought forward from 2016, changes to the sales mix, lower Government spending on schools, weaker fixed cost coverage and serious issues with the new ERP system,” he told investors.
Havelock Europa’s customers have included Primark, Holland and Barrett, and House of Fraser.