Black Arrow shares move up despite profits fall

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The Independent Online
SHARES in Black Arrow Group jumped by almost a fifth to 25p despite a sharp fall in full-year profits reported yesterday by the west London office furniture maker.

The taxable surplus slumped by a third to pounds 1.26m on a similar decline in group turnover to pounds 16.5m for the 12 months to 31 March.

The sharp decline was the second in successive years. The group made profits of pounds 4.6m in 1989 but a year later slipped to pounds 3.75m before tax. A maintained total dividend of 2.1p and an rise in earnings per share from 3p to 3.5p, thanks to a lower tax charge, helped to buoy the shares.

However, the results mask a deeper slide at the operating level as the taxable result includes a pounds 308,000 one-off profit on the sale of surplus property owed by a subsidiary.

Arnold Edward, chairman and managing director, said the results reflected the impact of the recession on demand for office furniture, which accounts for the bulk of the group's profits. Almost all its sales emanate from the UK.

The company also benefited from the writeback of pounds 71,000 provisions from previous years. These were been taken below the line.

Black Arrow ended the year with a strong balance sheet. It is virtually debt-free.

Although the company has seen a small uplift in trading conditions recently, Mr Edward is not expecting any significant recovery in the immediate future.

'I rather suspect that this low level of business will continue into the next year,' he said. However, he added that this year's performance would not produce a further deterioration in profits.