Havelock Europa tumbles after profit warning

1st Sep 2015 15:04

(ShareCast News) - Shares in Havelock Europa tumbled on Tuesday after the company said full-year 2015 results will be materially below previous guidance, as it announced job cuts and the sale of its Teacherboards business.Revealing the outcome of a business structure review, Havelock, which is an interior solutions provider, said it will reduce staffing levels by around 10% as it looks to streamline and simplify the business model.In addition, the company said it was selling educational supplies business Teacherboards to Sundeala Limited for a total consideration of £1.36m, which will be used to reduce the group's net debt. At 30 June, this stood at £3.1m.It said the changes were designed 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.Havelock, which is entering into a period of consultation with its workforce from Tuesday, said the changes will reduce operational gearing and deliver expected annualised cost savings of £3m.In addition, the company warned that full-year results won't live up to previous guidance. It said it has reviewed its order book for the rest of the current year and noted that demand in the retail and financial services sectors remains subdued.Chief executive David Ritchie said: "Our customer survey and review of the business demonstrates that these changes are necessary. We are rebasing 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."At 1516 BST, Havelock shares were down 30.3% at 12.02p.