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LONDON (Alliance News) - Havelock Europa PLC shares dropped in early trade on Thursday after the company posted a flat loss in the first half, but reported a decline in revenue amid a challenging business environment and said its full-year results will be dependent on the fourth quarter.
The interior solutions provider said its pretax loss in the six months to June 30 was flat at GBP2 million. This came despite a slight fall in revenue in the period to GBP32.5 million against GBP34.2 million the year earlier, as the company's costs remained under control.
The fall in revenue was attributed by Havelock to anticipated falls in business from the education sector and a quieter period for its financial services operation.
The anticipated delays to the school-building programme resulted in a 6% fall in revenues for the company's Interiors arm in the period to GBP29.5 million from GBP31.3 million a year earlier.
The company said its won a framework contract with Barclays PLC, a deal similar to the work Havelock is undertaking for Lloyds Banking Group PLC and TSB Banking Group PLC. It said it expects to further develop this opportunity in 2015 and said it is in talks with further prospective financial sector clients.
The group said it delivered the first phase of a three-year contract secured with an Australian retailer in the first half and is continuing to invest in its international business in Australasia.
But revenue from its Educational Supplies business dropped 9% in the period due to delays in new school projects, falling to GBP3.2 million from GBP3.5 million. It said its business has also been impacted by the UK government's decision to provide free school meals to primary school pupils, as many schools have decided to use their discretionary cash flow on upgrading canteens instead of buying educational supplies.
Chairman David MacLellan said the company's targets for the second half will be dependent on the finalisation of orders and delivery schedules in the fourth quarter.
Havelock shares were down 8.3% to 22 pence on Thursday, making it one of the worst performers in the AIM All-Share index.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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