Bullough interim profits disappoint

SHARES in Bullough, the industrial holding company, took a battering yesterday, falling 21p to 114p after the group announced disappointing results for the six months to 30 April.

Pre-tax profits were 18 per cent lower at pounds 5.9m (pounds 7.2m) on turnover down almost 7 per cent to pounds 132.7m. Bullough's principal businesses - office furniture and refrigeration - were particularly badly affected. The City had been expecting interim profits in the pounds 7.5m-pounds 8.5m range.

The figures were particularly disappointing, analysts said, because the company indicated as recently as March that it expected to match last year's performance.

The interim dividend was held at 1.75p and the company predicted that it would also maintain the final dividend. But it forecast reduced profits for the full year. John Houlihan, at Hoare Govett, said he now expected about pounds 16m against last year's pounds 20.8m.

Robert Steel, managing director, said an expected increase in business for the refrigeration division had failed to materialise.

'We geared up for more business from the supermarket chains, but the programmes we discussed with them have been slow in starting, perhaps due to poor Christmas trading and the uncertainty that surrounded the general election,' he said.

Mr Steel added that the delays in starting such projects were continuing. But he pointed out that typically 70 per cent of the profits from the refrigeration company come in the second half of the year - 'it will probably be even more this year'.

Bullough also suffered difficult trading conditions in its biggest business, the office products market. The division reported a 64 per cent drop in operating profits.

Mr Steel said that a cost-reduction programme had kept the profits fall at Project, the UK office products company, down to 13 per cent. But Atal, the French equivalent, saw its profits virtually wiped out. It had proved much more difficult to reduce costs in France because of legislation protecting workers.