Havelock Europa narrows losses

The welcome news was largely a result of the reduction in contracting spend from a major banking customer announced in November 2015 and on the back of efforts to increase efficiency,

Last year said it was cutting about a tenth of its workforce amid subdued demand from clients in the retail and financial-services sectors.

Despite the reduction in turnover, the group was able to more than halve its operating loss for the period.

Group operating loss for the period, before taxation and exceptional items, was £0.7m (2015: loss £1.6m).

The loss per share after exceptional items was 2.3p (2015: loss of 5.0p).

Net debt at the end of June 2016 of £3.6m was slightly higher than that recorded in June 2015 (£3.1m). The increase reflects the investment made in restructuring the business in Q4 2015 and the ongoing investment in our ERP project.

The half yearly increase in Group net debt to £3.6m (December 2015: Nil) also reflects the seasonality of the business, as revenue is typically summer / second half loaded, and this pattern is consistent with previous years. During the six months to 30 June 2016 the pension deficit, before deferred tax, increased to £3.5m (December 2015: £1.0m).

In December 2014 the deficit was £3.7m and subsequent movements reflect the volatility which the pension scheme is subject to, largely due to the reduction in long term interest rates. The Trustees and the Company are exploring ways of reducing this volatility.

Chief executive David Ritchie said: “I am pleased to be able to report that, largely due to the actions we took last year to right size the business and standardise business processes, the business has benefited from strong margin improvement, which has led to a significant reduction in the first-half loss compared to last year.”

Chairman David Maclellan noted that the search for his successor has started “with the aim of concluding this appointment by the year-end”.