Spending cutbacks among fit-out contractor's retail clients likely to hit first-half sales

Retail fit-out contractor Styles & Wood expects first-half turnover to fall by 40% as clients cut back on spending, it said today.

In a statement to the stock market for the period from 1 January, the board said it had met with tough trading conditions as retail customers delayed or reassessed store investment programmes and market competition intensified.

Uncertainty around the firm's position had also contributed to falling sales, it said. “We believe that some of our framework customers have been reluctant to place new orders with us owing to uncertainty surrounding our ownership and strength of our balance sheet,” the statement said.

Ivan McKeever
McKeever: put in train substantial refinancing of the group

On 30 April, the firm announced a substantial refinancing of the group, which should be completed by 2 July if shareholders give it the go-ahead. The firm added that measures had been taken to improve cash and margin controls.

Chief executive Ivan McKeever said: "Since I became CEO in June 2008, net debt has reduced from £22m at 30 June 2008, to £17m at 31 December 2008 and following the restructuring (treating the new convertible preference shares as equity) the business expects to be in a net cash position.

"Our secured order book now stands at £97m and is in line with our revised expectations. We are delighted with the support our customers have shown us, particularly since the refinancing announcement.

“Having taken swift action on cost in 2008, maintained our customer base and having agreed the refinancing… we believe that the business is well positioned to benefit from any upturn in retail activity."