17th Apr 2014 09:26
LONDON (Alliance News) - Interiors company Havelock Europa PLC saw its shares rise Thursday, after it reported that it swung to a pretax profit in 2013 for the first time since 2008 and cut its debt, and said it would try and achieve more cost savings.
It was also more confident about its outlook, saying it hoped to benefit from the UK economic recovery this year, and an expected pickup in its educational business from 2015.
The company was hit hard by the economic downturn, particularly its education business, and has been focusing on cutting its debts and costs in an attempt to return to profit. It has also been growing in markets like finance, revamping interiors for bank branches, as well as pushing into new markets like healthcare.
It reported a net profit of GBP283,000 for 2013, compared with a loss of GBP345,000 from continuing operations in 2012, even though revenue declined to GBP89.6 million, from GBP94.5 million. Its cost of sales, administrative expenses and finance costs all declined in 2013. Its pretax profit was GBP632,000, compared with a GBP515,000 pretax loss in 2012.
Net debt was reduced to GBP0.3 million by the end of 2013, from GBP2.4 million a year earlier.
"The group has made strong progress and I am pleased to report the business has delivered its first pretax profit on continuing operations since 2008 and net debt has been reduced to GBP0.3 million. This return to profitability was driven by a diversified customer base in the improving retail sector and high level of activitity in financial services," Havelock Chief Executive Eric Prescott said in a statement.
The business, which is based in Scotland, said it was hoping to take advantage of the growing economic recovery in the UK, and said it hoped that recovery wouldn't be destabilised by the referendum on Scottish independence.
"The retail sector in the UK is improving and there are positive signs of renewed consumer confidence; this is reflected in our new business wins. Recent announcements of increased government spending on education are also encouraging, the results of which will be seen in the business in 2015," it said.
It said its strategy would be to try and grow its business in retail, finance, education and healthcare, as well as it overseas retail business, which it expects to account for more than 10% of its revenue shorty, from 5% in 2013.
It added that it will continue to inevst in an effort to drive further efficiencies in the business and improve its margins.
The company isn't paying a dividend at the moment, but said it will consider resuming payouts once its profitability improves further.
Havelock Europa shares were up 8.6% at 23.9 pence Thursday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
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