Styles & Wood six-month turnover down by 40%

Styles & Wood (S&W) anticipates that workload in the six months to the end of June will be 40% lower than in the first half of 2008.

Ivan McKeever, chief executive, said in a trading update this morning: “We believe that some of our framework customers have been reluctant to place new orders with us owing to uncertainty surrounding our ownership and the strength of our balance sheet

However, McKeever reckons that S&W has weathered the storm. Since taking the helm 10 months ago he has drawn up a turnaround plan.

“Management have taken early and tough action to align overheads to a forecast fall in revenue,” he said, “reflecting a tough trading environment for many of our retail customers.

“In addition, measures have been taken to improve cash and margin controls.”

On 30 April, the board announced a major refinancing designed to put S&W on a solid financial footing, taking the business into a net cash position and to provide “the requisite cash and debt resources to trade through the current economic cycle”.

The deal is still subject to shareholder approval but it is anticipated that will be agreed and completed by 2 July.

McKeever commented: “During the period since 1 January, we have seen the continuation of tough market conditions as retailers delay or reassess their store investment programmes and competition in our market intensifies.

 “Since I became chief executive officer in June 2008, net debt has reduced from £22m to £17m at 31 December and following the restructuring, the business expects to be in a net cash position.

“We are delighted with the support our customers have shown us, particularly since the refinancing announcement.”