HAVELOCK Europa's shares resumed their upward trend yesterday as the group reported an encouraging start to the current year after a solid rise in 2005 profits.
The Fife-based group said its retail interiors and point-ofsale display businesses both performed strongly while education furniture, which has transformed the group's prospects in the past two years, was poised to benefit from a wave of spending on schools over the next two years, particularly in Scotland.
Last year, however, business was "static", because of a lull in spending programmes influenced by the general and local elections.
Hew Balfour, chief executive, said: "We are very positive about the education market, we can see continuing spend in that sector."
Underlying pre-tax profit was up from GBP4m to GBP5m, with reported profit at GBP6m. Overall revenue was up 16per cent at GBP100m, helped by two bolt-on acquisitions in education. The total dividend is raised 13per cent to 3.6p.
Havelock said the first three months of 2006 had seen the retail interiors division add to its order book "above the seasonal norm", as a result of a high degree of activity from retailers notably Primark and long-standing customer Marks & Spencer.
Bank of Scotland, another long-established client, had provided an important boost with its opening of a branch network in Ireland.
Strong demand in healthcare, a new market for Havelock intended to smooth out the retail sector cycle, saw the group involved in both primary and secondary sectors, installing equipment such as reception desks and nursing stations.
Work is already under way at 12 of the 16 school sites in which Havelock expects to be involved this year.
"With activity in the factories at Dalgety Bay and Kirkcaldy already at a high level, the total value of PFI/PPP business is expected to be materially up on the invoiced turnover last year, " the group said. Direct business with local authorities remained solid, it added.
In point-of-sale display, Somerfield's disposal of the majority of its Kwik-Save stores would result in a substantial reduction in business from a key customer, and some job losses at Bristol. The reduction had, however, been partly offset by a strong performance at the company's other base at Letchworth, Herts.
Net debt reduced slightly to GBP14.1m, despite the deferred payment of GBP2.2m in cash and loan notes for previous acquisitions. Net cashflow from operations increased by 17per cent to GBP5m.
The shares rose 5p to 166p yesterday.
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