Styles & Wood Group Regulatory News (STY)

19 May 2009 17:59



19 May 2009

Styles & Wood Group plc

Interim Management Statement

The Board (the "Board") of Styles & Wood Group plc ("Styles & Wood") or the "Group") announces its Interim Management Statement relating to the period from 1 January 2009 to 19 May 2009. 

During the second half of 2008 a new management team, lead by Ivan McKeever, was put in place to create and deliver a turnaround plan for the Group and guide it through the current economic cycle. Management have taken early and tough action to align overheads to a forecast fall in revenue, reflecting a tough trading environment for many of our retail customers. In addition, measures have been taken to improve cash and margin controls. 

On 30 April 2009, the Board announced a substantial refinancing of the Group designed to put it on a solid financial footing, take the business into a net cash position (treating the new convertible preference shares as equity) and to provide Styles & Wood with the requisite cash and debt resources to trade through the current economic cycle. The refinancing, further details of which were contained in the refinancing announcement issued on 30 April 2009, is subject to shareholder approval and is expected to be completed by 2 July 2009. A circular containing further details of the refinancing and a prospectus in relation to the issue of the new shares are currently being prepared and will be issued as soon as practicable.

During the period since 1 January 2009, we have seen the continuation of tough market conditions as retailers delay or reassess their store investment programmes and competition in our market intensifies. We believe that some of our Framework customers have been reluctant to place new orders with us owing to uncertainty surrounding our ownership and the strength of our balance sheet. Hence revenues for the period from 1 January 2009 to 30 June are anticipated to be in line with the Board's revised expectations but almost 40 per cent. down as compared with the same period last year. The current secured order book stands at £97m and supports our revised half year revenue projections. However, difficult market conditions continue to prevail in our marketplace and it is too early to predict a full year outturn. 

Ivan McKeever, CEO of Styles & Wood plc said:

"Since I became CEO in June 2008, net debt has reduced from £22m at 30 June 2008, to £17m at 31 December 2008 and following the restructuring (treating the new convertible preference shares as equity) the business expects to be in a net cash position.

"Our secured order book now stands at £97m and is in line with our revised expectations. We are delighted with the support our customers have shown us, particularly since the refinancing announcement. Having taken swift action on cost in 2008, maintained our customer base and having agreed the refinancing (as referred to in the announcement made on 30 April 2009, we believe  that the business is well positioned to benefit from any upturn in retail activity."

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