Havelock Europa shares tumble after profit warning

Shares in Havelock Europa plunged in value today after the Fife-based shopfitting and interiors group warned over annual profits.

Havelock blamed delays with key customers and lower public sector orders. Picture: Contributed

The firm, which earlier this year warned of challenges ahead following the loss of a major client, said its results for the year to the end of December would fall “considerably below expectations”.

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Following the warning, shares were down 37.5 per cent at 6.25p, having earlier halved in value to 5p.

Kirkcaldy-headquartered Havelock, led by chief executive David Ritchie, blamed the shortfall on “delays in the commencement of work for key customers and lower-than-anticipated orders from the public sector”.

It added: “These developments are set against the previously announced backdrop of reduced activity in the first half and costs associated with the implementation of the enterprise resource planning system.”

Havelock said a further update will be provided alongside its half-year results, due for release on 27 September.

In April, Havelock reported a return to the black with a pre-tax profit before exceptional items of £400,000 for 2016, compared with an £800,000 loss the previous year.

Like-for-like revenue jumped by about a fifth to £59.4 million, excluding the loss of business from a major financial services client – believed to be Lloyds Banking Group – announced in late 2015.

Total revenue for 2016 was £60.8m, down from £70.3m in the previous year when the major client contributed £21.1m. Havelock also highlighted a major increase in public sector sales last year, especially in education.

At the time of the results, chairman Ian Godden said the first half would be “challenging” with orders slightly lower than last year.

He added: “Although the business is continuing to progress, it still retains a high dependence on second-half orders, which restricts our visibility for the full-year outturn.”