Shares in shopfitting and interiors group Havelock Europa plunged today as it warned of a “material” hit to its finances after being told that a major client is cutting back its spending.
The Fife-based group, which recently announced plans to axe about 50 jobs, said its largest financial services client will be “substantially reducing” its planned spending on refurbishment and development next year.
As a result, Havelock said contracting revenues from the unnamed client for branch revamps would be “negligible” next year.
It added: “Contracting revenues from these programmes for 2015 will be about £14 million and will be unaffected by the new arrangements which will take effect from 1 January 2016. There will be little financial impact on 2015 results but the impact on 2016 will be material before mitigating actions are undertaken.”
Shares in the company were down more than 41 per cent after the warning.
Chief executive David Ritchie said: “Today’s news is disappointing, clearly, but underlines the importance of our strategy to further diversify our customer base to become less reliant on a small number of contracts.
“The simplified business model we are implementing will also help us maximise the customer experience across that broader portfolio of clients. We are committed to delivering that change and thus mitigating the impact of this decision in 2016 and beyond.”