Styles & Wood plans to pay subcontractors less

Fit-out specialist Styles & Wood will be looking to pay its subcontractors less as retail clients put a brake on spending plans.

Latest interim results showed pre-tax profit had fallen to £2.4m for the six months to June compared with £5.2m in 2009. Turnover during the same period fell from £150m to £123m, while margins in the core business were cut to 1.9% from 2.9%.

The falls were caused by retail clients delaying shop investment plans as the slowdown continues in consumer spending.

Styles & Wood will now sit down with its trade contractors and suppliers to thrash out ways of cutting costs.

Chief executive Ivan McKeever told CJ: We will be working closely with our supply chain to discover efficiencies.

Its not a question of us knocking down rates. Our suppliers are a valued part of the whole operation and we will be working with them on this.

McKeever joined the company in June following a period of turmoil. Styles & Woods markets took a dive as former chairman Gerard Quiligotti and chief executive Neil Davies stepped down from their roles following a failed management buy-out attempt.

About 80 employees have left the firm during the past 18 months as costs were cut to deal with a shrinking market. The firms workforce now stands at 330.

McKeever said: It has been a busy first three months for me and I have concentrated on managing the expectations of the business, reducing the cost base and retaining our customers.

The food sector continues to perform strongly with key clients such as Morrisons, Tesco and Waitrose still investing heavily.

About 90% of Styles & Woods work is through frameworks. McKeever said: If youre not on a framework its a cold place to be. Our customers will return to spending and we want to be in as good a shape as possible when that time comes.