Styles & Wood hails 'transformation' of prospects after refinancing

Fit-out firm Styles & Wood is cash positive again after an overhaul of its finances, and predicting a possible recovery in the retail market by 2010.

The upbeat pronouncements as part of its interim results for the six months to 30 June 2009 came at the end of a hard 12 months for the firm, which saw it announce a refinancing in April, followed by a warning in May that turnover was set to fall 40%.

Revenue for the six months to 30 June 2009 was down 39% to £74.8m, while the company declared a pre-tax loss of £1.1m. However it indicated that underlying operating profit was £0.9m, compared to £3.6m in the first half of 2008.

The refinancing, completed in June this year, saw Styles & Wood generate net cash of £13.8m, putting it in a new cash position of £8.7m compared to net debt of £22.4m in the same period a year ago. But the figure excludes the £7m element of the group's preference share capital that is treated as a long term liability.

The firm conceded that on top of challenging market conditions, Styles & Wood saw its framework partners reduce allocation to the firm due to concerns earlier in the year about the group's financial strength.

But chief executive Ivan McKeever said: ""The achievements of the first half have transformed the prospects for the Group. We have successfully completed a major refinancing to ensure that the Group is on a solid financial footing to weather the economic downturn. As a result, the Group now has a strong balance sheet, and is in a cash positive position for the first time in many years.

"Whilst we are aware that the recovery will be slow, we are confident that the Group's strong balance sheet, coupled with our continued focus on cost controls, cash generation and strong customer relations, means that we are well placed to take advantage of the market upturn and maintain our market leading position."

The company also predicted a possible recovery in retail by 2010, following a a bottoming-out in the market.