Profits almost trebled to pounds 12.5m in the year to end-March. The recovery was mainly due to a pounds 5m turnaround at the knitwear and clothing division. Profits are still well shy of the pounds 32m made in 1993, but contrast starkly with the pounds 98m loss in 1994 as the group struggled with the cost of restructuring businesses and cutting out a quarter of the workforce.
Operating profits in 1996/97 rose 9 per cent to pounds 16.8m on sales down by 2 per cent to pounds 297m. Earnings per share rose 25 per cent to 5.4p, and the dividend was raised 10 per cent to 3.3p.
The company said trading conditions remained tough. The best performance came from the fabrics division, which contributed pounds 4.2m, with UK sales buoyant in the second half of the year. The knitwear and clothing division, however, still made a loss of pounds 1.7m in spite of improved performances from Barrie Knitwear and Pringle of Scotland.
Profits from the fibres and yarns division almost halved to pounds 6.4m, reflecting the cost of getting out of the loss-making wool-combing at a cost of pounds 600,000, and a drop in demand for cashmere at a time when suppliers of the raw material in the Middle East refused to reduce prices. The group is in the process of relocating the dehairing of cashmere skins to China which, it believes, will give it a competitive advantage.
Half of group profits came from the thermal clothing division, although the performance was unchanged on the previous year. However, a new management has been brought in and hopes to improve performance in the current year.
On group prospects, Derek Finlay, chairman, said he was increasingly confident of further progress provided the competitive position was not eroded by further strengthening of the pound.