Havelock's 2016 revenue to take a hit as major client cuts spending

Shares in Havelock Europa slid on Tuesday after the interior solutions provider said one of its largest financial services clients will be substantially reducing its spend on refurbishment and development next year.

As a result, the contract revenue Havelock will receive from this client next year will be negligible, although the company will be retained as the preferred furniture provider by the client.

Havelock said contracting revenues from these programmes for 2015 will be around £14m and will be unaffected by the new arrangements which will take effect from 1 January 2016.

The company said there will be little financial impact on 2015 results but the hit to 2016 will be material before mitigating actions are undertaken.

Chief executive David Ritchie said: “Today's news is disappointing, clearly, but underlines the importance of our strategy to further diversify our customer base to become less reliant on a small number of contracts.

“The simplified business model we are implementing will also help us maximise the customer experience across that broader portfolio of clients. We are committed to delivering that change and thus mitigating the impact of this decision in 2016 and beyond."

At 1217 GMT, Havelock shares were down 36% to 7.35p.