Styles & Wood dives into the red with £950,000 loss

Styles & Wood issued its latest annual results at 6pm last night. They show a pre-tax loss of £950,000.

In the previous year the group made a profit of £12m.

Turnover in the 12 months to 31 December 2008 was £240m, well down on the figure of £320m in 2007.

The fit-out specialist’s on-going woes resulted in changes at the top during 2008. Ivan McKeever stepped forward as chief executive officer following Neil Davies’ decision to quit the post.

Gerard Quiligotti, executive chairman, resigned at the same time.

Davies and Quiligotti have not received any compensation payments.

Graham Clark continues in the role of finance director.

McKeever said: “In response to the negative economic outlook and intense financial pressure, our customers have reduced capital expenditure budgets which has resulted in orders being cancelled, delayed or deferred.

“Despite these difficulties we have retained all of our framework customers and overall there has been an increase in our customer base.

“While general retailers have been most affected by the financial turbulence, we have seen relative strength from customers in food retail as well as office and banking.”

Results for the year include charges running to a total of £4.7m covering contract losses and other non-recurring items.

Losses amounting to £3.5m relate to a small number of contracts generally from 2007 where further costs were identified in the current year.

“This has been a major concern for management and the matter has been rigorously reviewed using both internal and independent external resources,” said McKeever.

“We are satisfied that controls in this area have now been strengthened.”

Redundancies cost £800,000 and expenses connected with an aborted public to private approach made by Davies and Quiligotti led to a further £300,000 charge.

The company also announced at 6pm yesterday that it has raised £10m of new funds through the issue of new shares.

The UK market for fit-out, refurbishment and related services was estimated to be worth £8bn in 2008 of which retail makes up £2bn.

The retail market can further be divided between food sector (49%) and general retail (51%).

McKeever said: “During 2008 we witnessed resilient investment by food sector retailers and reduced investment in the general retail sector and expect this trend to continue into 2009.

“Styles & Wood is well positioned to take advantage of food retail sector growth plans and expects some growth to return in the general retail sector in 2010.”

The UK market for office fit out, refurbishment and related services is estimated to be worth £2.8bn in 2008.

The group’s cash generated from operations last year was £3m (previous year: £14m).