Courtaulds bullish despite profit slump

Courtaulds Textiles, whose former chief executive, Noel Jervis, was forced out last June, said the reorganisation programme unveiled by new management in September was moving faster than expected and within budget.

Exceptional costs of pounds 31.7m in effect wiped out profits for last year, but the group said profits had grown in the latter six months of the year.

Reflecting its confidence in the outlook, the board is maintaining the final dividend at 10.1p, making an unchanged total of 15.3p for the year.

Colin Dyer, the new chief executive, said: "Trading in 1997 has continued the pattern of last year's second half with encouraging progress, particularly in the UK and USA. At this early stage of the year, we are meeting our targets."

The company said the annual benefits of the restructuring would build to between pounds 10m and pounds 13m by 1998, with only a couple of million pounds coming through in the current year. With eight businesses sold since June, most of the planned disposals have been made and further exceptional costs will be limited to between pounds 3m to pounds 4m, the company said.

After last year's charges, pre-tax profits slumped from pounds 36.5m to pounds 400,000 in the year to December. Even stripping out the exceptional costs they slipped from pounds 40.4m to pounds 32.1m, which the company blamed on a drop in first half-profits from US lace and stretch fabrics.