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Downturn at Strong & Fisher

A VOLATILE market in sheepskin has torpedoed earnings at Strong & Fisher, the leather manufacturer rescued by Hillsdown Holdings 18 months ago, writes John Murray.

Pre-tax profits for the six months to 30 June fell 59 per cent to pounds 2.1m (pounds 5.2m). Michael Buswell, chairman, said a shortage of lambs slaughtered in the spring drove up sheepskin prices, drastically cutting margins.

He said that the world recession had also had a severe impact because 90 per cent of Strong & Fisher's production was exported. The weakness of the dollar was also having a negative effect.

The company's animal by-products division was also hit by raw material shortages as the UK abattoir industry's livestock output fell considerably last year.

Mr Buswell was cautious about prospects for the second half, although he did predict a better perfomance. He said that the company was still looking for 'a third string to our bow' to add to the two core businesses.

The company is not paying an interim dividend because of the volatile nature of the business. The shares held at 19p.