Havelock Europa Regulatory News (HVE)

24 Jun 2005 12:00

Havelock Europa PLC24 June 2005 HAVELOCK EUROPA PLC AGM STATEMENT Group on target to deliver further good progress in 2005 At this afternoon's AGM of Havelock Europa, the educational furniture andsupply, point of sale display and retail interiors group, the Chairman, MalcolmGourlay, made the following remarks with regard to current trading andprospects. "Trading for the first six months of the year is expected to be in line withbudget, with a sound performance from Point of Sale Display, an improvedcontribution from the Retail Interiors Division and a somewhat slower thananticipated period for sales in the "direct to schools" sector of educationfurniture. Within the Point of Sale Display Division our investment programme continues. Anew high volume digital printing press is being installed at Hartcliffe, inBristol. This will confer significant advantages in the production of point ofsale ticketing, both for our customers and ourselves, in terms of speed andcollation, once it has been commissioned in the autumn. In the Retail Interiors Division, the level of activity has been strong, despitethe reported slow down in the High Street. A particularly high level ofenquiries has been received from the financial services sector. The prospectsfor this business are likely to continue to improve throughout this year as aresult of a successful diversification of the customer base and the recent entryinto the healthcare and accommodation services markets. Whilst PFI sub-contractor business will show an improvement in overall activitythis year, ESA McIntosh, the UK market leader in science laboratories and fittedfurniture for schools, has started the year more slowly than expected. Despite abrisk level of enquiries from Local Authorities and direct from schools, thevolume of actual orders to date has been slower than last year, in that sectorof the market. After a particularly slack period around the time of the Generaland Local Elections, orders and enquiries have picked up sharply in the last fewweeks. We are confident that this improvement will continue. TeacherBoards, which was acquired last June, has made a strong start to the yearwith business for the first five months ahead of budget. Clean Air, acquired last July, has had a more modest start to the year, stemminglargely from the slower than anticipated activity in the schools refurbishmentmarket, outlined before. The Group has continued to strengthen its senior management team and, over thenext quarter, it is intended to consolidate further the synergies availablebetween education, healthcare and retail interiors, with a reapportionment ofresponsibilities. This restructuring is expected to produce an optimal use ofthe Group's assets as well as providing improved customer service and a launchpad for the further significant growth expected over the next two years. The Interim Results for 2005 will be the first financial statements prepared inaccordance with International Financial Reporting Standards. The key differencesbetween UKGAAP and IFRS were outlined in the 2004 annual report. The requirementunder IFRS to recognise revenue after installation will result in timingdifferences in the recognition of revenue on education supply and fit contractsand this will increase the seasonal bias towards the second half of the year. The Board remains optimistic about the growth opportunities in the markets inwhich it is active. The rate of progress towards financial close of a series ofPFI contracts, in the education and healthcare sectors, is now in line withexpectation following the adjustments made after the withdrawal of Jarvis fromthe sector. The Board anticipates further overall progress in the full year,with significant growth in 2006 and 2007 in the education and healthcare PFIsectors. In addition, the Group will continue to study opportunities forappropriate acquisitions in these two markets." Enquiries: Havelock Europa PLC 01383-820 044Hew Balfour (Chief Executive)Graham MacSporran (Finance Director) Bankside Consultants LimitedCharles Ponsonby 020-7367 8851 This information is provided by RNS The company news service from the London Stock Exchange