Havelock Europa, the Fife-based shopfitting and interiors group, today said it faced increased uncertainty following the Brexit vote as it unveiled a sharp reduction in first-half losses.
The Kirkcaldy company, which last year said it was cutting about a tenth of its workforce amid subdued demand among clients in the retail and financial services sectors, posted a pre-tax operating loss of £708,000 for the six months to the end of June, down from a £1.6 million loss a year earlier.
The narrower deficit came despite revenues sliding 12 per cent to £25.4m, which Aim-quoted Havelock said was “largely as a result of the reduction in contracting spend from a major banking customer”, understood to be Bank of Scotland owner Lloyds Banking Group.
Chief executive David Ritchie said: “I am pleased to be able to report that, largely due to the actions we took last year to right size the business and standardise business processes, the business has benefited from strong margin improvement, which has led to a significant reduction in the first-half loss compared to last year.
“In addition, strong demand from the public sector has helped to offset weakness in retail and the expected downturn in the corporate sector.”
Although Havelock said current trading remains in line with market expectations, it said the UK’s decision to leave the European Union had “increased the market uncertainty across our customer base”, while pressure on pricing had increased following the Brexit vote and “activity within the retail and lifestyle sector remains subdued”.
Following today’s results, house broker WH Ireland said: “Whilst acknowledging that risks remain given both the second-half weighting and the early stage of this turnaround story, with the potential for both revenue and margin progress, we see further upside to the shares if the strategy can be executed successfully.”