Brooks scraps dividend

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The Independent Online
BROOKS SERVICE Group, the textile rental and retail services group, has scrapped its interim dividend after making a pounds 104,000 pre-tax loss in the half-year to 27 June against a profit of pounds 336,000 in the previous first half, writes Alison Eadie. Turnover was marginally lower at pounds 11.7m.

Simon Brooks, chairman, said the first half bore the cost of plant reorganisation taken against revenue, the benefits of which were beginning to be felt. He said markets remained exceptionally difficult.

Sales in the workwear division held up, but margins remained under constant pressure. The market is very competitive, especially with rising unemployment, the company said.

Customer demand for dry- cleaning services was depressed, particularly in the South-east and South-west, where the company has most of its retail outlets. There are signs that trading in the shops is improving and the company is considering new openings encouraged by the 'unprecedented opportunities to secure good retail sites'.

The linen service division won a substantial order from Forte at the start of the year, but in general the contraction in hotel occupancy dented turnover. The market continues to be intensively competitive and shows no sign of recovery, Mr Brooks said. However, bad debts are at an acceptably low level. The shares were unchanged at 70p.