Berisford makes 40m pounds provision

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The Independent Online
BERISFORD International, the commodities and property group, has made a pounds 40m provision to cover a guarantee made to the banks of its associate company, Rayner Coffee International.

The partners of RCI, who own the 55 per cent not owned by Berisford, have agreed to sell the coffee trader's businesses over the next 18 months to cover as much of their debt as possible, but they will not be able to repay it in full.

Berisford's original exposure under the guarantee was dollars 115m ( pounds 59.5m). At the half-year stage on 31 March the debt had been reduced to dollars 86m, and it is now dollars 55m. The pounds 40m provision breaks down into the expected shortfall between RCI's assets and liabilities and the likely losses incurred by Berisford in hasty asset sales to meet its exposure.

Alan Bowkett, chief executive, said the write-off should wipe the slate clean and leave Berisford to concentrate on the future.

'What I want to do now is to use Berisford as the vehicle for moving forward in manufacturing, particularly in my area of expertise which is engineering, and using the pounds 30m of tax loss here and the dollars 650m in the US,' he said.

He is considering a number of acquisitions in the UK.

Berisford has also extended its banking facilities, which were due to expire on 30 June, through to 31 March next year.

The company made a pounds 12.1m pre-tax loss in the half-year compared with a pounds 4.4m loss last year. Its trading operations almost broke even, but it suffered a fall in the value of its UK commercial properties and a provision against a long-term trade investment.

There was a loss per share of 2.6p compared with 0.9p. Turnover fell to pounds 103.1m from pounds 549.8m because of huge disposals over the past year.

The pounds 40m provision against RCI is part of a pounds 45.3m extraordinary item. Also included are the anticipated cost of a redundancy programme and the cost of the recent aborted rights issue. The shares fell 1p to 15.5p.

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