Havelock Europa losses fail to dent share price

SHAREHOLDERS in shopfitting and school labs specialist Havelock Europa brushed aside a warning from the group yesterday that it would make a loss in 2010 due to the recent poor weather.

Shares in the Dalgety Bay-based company closed unchanged at 8.25p after it admitted in a trading statement that 3 million worth of sales had "slipped into 2011" due to delivery delays. But the firm also revealed it had signed contracts with Marks & Spencer in China and Primark in Europe.

The profit warning will come as a disappointment to Havelock's new chief executive Eric Prescott, only months after the firm announced it was relying on the second half of 2010 to be a "foundation for recovery", having revealed first-half losses had widened to 4.6m.

The group said that while it had delivered "significant positive changes" in 2010 this year would "remain difficult".

It said trading in early January, excluding delayed projects, was at expected levels with "solid indications" of improved orders in the second half.

Havelock has made a number of changes in the business since former chief executive Hew Balfour stepped down in April after 21 years with the firm. The firm also shifted its listing from the main market of the London Stock Exchange to Aim.

Internally, it has been making "substantial changes" to its business, including the integration of its retail interiors division with its education furniture businesses in Kirkcaldy, leading to cost savings.

The firm said its point-of-sale display business continued to perform well. It added that it has increased its market share in the education sector despite the termination of the government's "building schools for the future" programme.

Analysts at Investec said they expect the firm's debt-load will have returned to the 20m mark in 2010.