Brake on Casket's progress: Clothing arm depresses results for bicycle producer

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The Independent Online
FALLING profits in clothing businesses have held back Casket, the company that makes most of its money selling bicycles.

Pre-tax profits advanced 20 per cent to pounds 2.1m but the figure was flattered by a lower interest charge and the absence of one-offs that depressed the comparable results.

Operating profit - which gives a better idea of underlying trends - rose 3 per cent to pounds 2.9m from pounds 2.8m in the six months to 30 September.

Casket owns the marketing rights to the Lotus cycle used by the British Olympian Chris Boardman and is launching two models based on the carbon fibre superbike.

Cycles made Casket pounds 2.6m against pounds 2.4m on sales of pounds 28.6m, up from pounds 27.4m. However, clothing made a fraction of the profit on only marginally lower sales.

Operating profit margins on cycles was a healthy 9 per cent but Casket only made a paltry 1.1 per cent profit on sales.

Joe Smith, chief executive, said there were no plans to sell or close the clothing business, which is in the bottom end of the market.

Earnings per share were 1.9p against 1.6p. The dividend was raised to 0.4p (0.3p).

Ruth Keattch, an analyst with the stockbroker Granville, has reduced her profit forecast for the year from pounds 3.7m to pounds 3.4m. The shares were unchanged at 44.5p.