Bullough warns on profits

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The Independent Online
BULLOUGH's profits this year will be well below expectations, the office products and refrigeration group warned yesterday.

It blamed the bulk of its difficulties on problems at Atal, its French office furniture subsidiary.

Derek Battle, Bullough's chairman, said pre-tax profits for the year ended October were likely to be around pounds 8.5m. Analysts had been forecasting pounds 11m- pounds 12m.

The anticipated figure includes a pounds 3.3m exceptional charge for redundancy costs. The bulk of these are concentrated in Atal, where another 100 of the 1,200-strong workforce are likely to be made redundant.

So far this year more than 100 jobs have been cut at Atal, France's second-largest office furniture business, which last year contributed about pounds 3m of Bullough's pounds 20m of profits.

The shares fell on the warning, dropping 14p to 75p, before rallying to close down 6p at 83p.

Mr Battle said that the performance of the French business had been disappointing, but steps had been taken to cut costs. Atal's managing director had been replaced and Dominioni Yves, his successor, had already begun a redundancy programme.

'France is a tough country in which to operate,' Mr Battle said. 'Generally it is more difficult than in the UK to make adjustments.'

Despite the profit fall the 4.3p final payout will be maintained.