Earnings slump knocks LIG shares
Friday 04 December 1998
The City had expected lower interims owing to the launch of Durex in the US, but the slump in sales of medical gloves came as a surprise. The share price plunged by 31 per cent to 130p.
The group reported a 14 per cent drop in half-year pre-tax profits to pounds 7.9m and said that "full-year profits are unlikely to match those achieved in 1997/98". After a pounds 15m restructuring charge, LIG posted a first-half loss of pounds 9.8m.
Nick Hodges, chief executive, said the figures "reflected the impact of the US launch of Durex condoms and the transition of our examination glove business towards the manufacture of a premium range".
The group has been hit by an unexpected fall in sales of its standard medical gloves, which it had hoped to maintain at a high level as it makes the transition to making high-margin polymer-coated gloves. Mr Hodges said: "We were hoping to sell more standard gloves while we were moving into that sector, but the market is in a very difficult situation of overcapacity and falling prices." He also cited cheaper Asian imports.
Condom sales fell, with US sales down by 10 per cent owing to a rebranding programme.
LIG, which has a plant in Malaysia, was also hit by the collapse of the ringgit. It was forced to cancel a forward exchange-rate hedge, incurring an exceptional loss of pounds 2m.
Analysts were surprised the company had not mentioned the sales slump at a briefing last month. Michael King of SG Securities cut his full-year profit forecasts from pounds 45m to pounds 38m.
Diving in at the deep end is no excuse for shirking the style stakes
- 2 Why I'm on the brink of burning my Israeli passport
- 4 War is war: Why I stand with Israel
- 5 Blackest is the new black: Scientists have developed a material so dark that you can't see it...
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
Emergency data law: David Cameron plots to bring back snoopers’ charter
NUT strike: David Cameron announces crackdown on strike action ahead of mass industrial action
iJobs Money & Business
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...
£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...