Havelock Europa to shed 50 jobs following profit warning
The Kirkcaldy-based shop, school and office fitting firm is shedding 50 jobs following a review of the business led by new chief executive David Ritchie..
It will also sell its Teacherboards business to Sundeala Ltd for £1.4 million in the streamlining.
The furniture and interiors services company said it recently undertook a business structure review that concluded that it would need to “right-size” the business to a level and cost structure that will enable it to “deliver a sustainable, consistent level of profit on a more modest sales target”.
The company said that the sale of Teacherboards will reduce group operating profit in the short term.
In the long term the planned changes will reduce operational gearing and deliver annual cost savings of £3m. The money from the sale of Teacherboards will reduce the group’s net debt.
Havelock said demand was subdued in the retail and financial services sectors with limited forward visibility in the second half.
Chief executive David Ritchie, who joined the firm in May, said: “Our customer survey and review of the business demonstrates that these changes are necessary.
“We are re-basing the business to reflect the more competitive market place. No decision to reduce jobs is ever taken lightly, and we will do everything possible to support those colleagues affected.
“I am confident that the sale of our non-core business brings more focus to the group as a whole. The simplified business model will enable us to maximise the customer experience and allow us to continue to diversify our customer base and achieve future growth,” he added.
Havelock made a pre-tax loss of £5.8m last year but blamed the figure on one-off non-cash costs in which it wiped out debts and laid down foundations for the future.
Without such exceptional charges Havelock would have made a pre-tax profit of £180,000 from its slightly reduced turnover of £83.4m and operating profit of £538,000.
Earlier this year it moved headquarters from Dalgety Bay to Kirkcaldy.