Allders warns on profits

Click to follow
The Independent Online
SHARES IN Allders fell 50.5p to 139p yesterday after the department stores group warned that pre-tax profit in the current financial year would be below analysts' forecasts, but not less than pounds 19m.

Allders blamed rising interest rates, which kept shoppers at home during the summer sales. It said it had seen disappointing revenues during the sale and that it was unlikely to make up the shortfall during the rest of the season.

Nick Bubb, an analyst at SG Securities, said Allders had mistimed its summer sales. Mr Bubb reduced his pre-tax profits forecast, along with other analysts, to pounds 19m from pounds 23.5m and moved his recommendation to "hold" from "buy".

Allders said the former Maples furniture stores, bought last September, had taken longer than expected to establish themselves under the Allders brand.

Harvey Lipsmith, chief executive, said: "I am disappointed to have to cut back our profit expectations for this financial year, particularly after last year's outstanding performance and an encouraging first half this year. But it is now clear that six increases in interest rates have taken their toll of consumer confidence."

Mr Lipsmith said the conversion of the six Maples stores was completed three months behind schedule. The delay, on top of the conversion costs, had wiped around pounds 2m off profits.

Mr Lipsmith denied the warning signified a trend among shoppers away from department stores and towards specialist multiple chains. "While some department stores have been suffering from this downturn, I think we have some horrible figures awaiting us from the multiples," he said.