The new chief executive of struggling Fife furniture manufacturer Havelock Europa has revealed a turnaround strategy to drive the business forward.
Chief executive Shaun Ormrod joined the Kirkcaldy-based group in late September following the resignation of David Ritchie.
The departure came as the manufacturer posted a £2.6 million loss for the first six months of the year.
Since his appointment, Mr Ormrod has been working on a plan to start turning around the group’s performance.
The new strategy document – which looks at the short, medium and longer-term for the business – was presented to investors during a session that also involved chairman Ian Godden and chief financial officer Donald Borland in Edinburgh.
A second shareholder forum will take place in London.
Among the key points of the new strategy is improving customer service levels, converting more prospects from new and existing customers into solid work orders and growing margins by not chasing business into a “downward spiral”.
The immediate financial priority is to restore the business to profitability in 2018 from what it describes as a “reorganised business base with circa £60 million of revenues”.
The plan is then to grow turnover to £70m in 2019-20 with a target operating margin of 3%, with a longer-term view to increasing revenue growth by 5-10% from 2021 onwards and driving operating margin up to 4% and beyond.
Investors were told yesterday that “the prize” awaiting Havelock at the end of the turnaround was a leading design and product-led business generating between £90m to £100m in revenues with margins of 5% to 6%.
It also said it expected 20% of its business to be in overseas markets by that point and the strategy includes an ambition for a “major expansion” of its presence in the buoyant Dublin market.
It has identified the city as a “Brexit and European entry point” where a number of key customers were basing their operations.
Mr Ormrod said he was confident Havelock had the strength to fight back to health.
“In the short time I have been at Havelock I have already seen enough from the team here to give me great confidence that we can take Havelock back to market leadership, where it belongs,” Mr Ormrod said.
“The plan we are setting out today is intended to put the company on a strong footing once again, doing the right type of work for the right customers at the right price.
“I want Havelock to become synonymous with design-led innovation and I am excited about what lies ahead for us all.”
Shares in Havelock Europa closed flat for the day at 6p.
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