FIFE interior fit-out business Havelock Europa has installed a new chief executive after revealing pre-tax losses of £2.6 million for the six months to the end of June.
David Ritchie, who has led the business since May 2015, has resigned three weeks after Havelock Europa issued a profit warning that resulted in its shares plummeting by 40 per cent in one day.
Mr Ritchie has been replaced with immediate effect by Shaun Ormrod, the former chief executive of Farnborough International Airshow organiser Farnborough International. Mr Ormrod led that business for nine years until standing down in May.
Havelock Europa chairman Ian Godden, who admitted that “the outlook for the remainder of the year isn’t great”, said he expected Mr Ormrod to make a significant impact on the business in a short period of time.
“He was very successful at Farborough and he’s a fast learner,” Mr Godden said. “Havelock and the board have got a very strong belief that he’s going to be very good for our future.”
Despite the business seeing turnover slide by nine per cent to £23.2m and pre-tax losses triple to £2.6m, Mr Godden said “there are reasons for some cautious optimism for 2018”.
“We do expect the second half to be profitable but it won’t be enough to make profits for the year,” Mr Godden said, adding that the firm had been impacted by a slowdown in public sector work and a weaker opening order book.
He said he expects this situation to reverse because the firm, which fits out the interiors of hospitals, schools, offices and retail premises, is currently waiting to hear back on £50m worth of quotes issued in the public sector, more than double where it would normally be at this point in the year.
“You have to be in front of business to win business,” Mr Godden said. “Our quote bank is a key measure and we have managed to double that in the public sector in three months.
“We have £50m in the quote bank when normally it’s £20m. We have to win that - doubling the quote bank should in theory double the business but it doesn’t quite work like that - but it will have a major impact.”
Mr Godden said that Havelock Europa, which makes as well as installs furniture, also plans to invest in its manufacturing base, although he pointed out that the firm would have to return to profitability first.
“We’re really committed to the manufacturing part of this,” Mr Godden said. “As soon as we can we want to reinvest in our Kirkcaldy facility, but that has to come from success.”
At the end of October the firm, which saw its overdraft increase from £4.75m to £6m during the first half, will reveal the results of a strategic review aimed at bringing about that success.
It is expected that the review will detail plans to expand the firm’s supply and fit-out operations in Europe, the Middle East and Australia as well as looking at how to deal with its pension liabilities.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here