European recession depresses Courtauld

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The Independent Online
RECESSION on the Continent has undermined profits growth at Courtaulds Textiles, the fabrics concern, in spite of strong demand for its Gossard Ultrabra.

Clothes sold in France under the Georges Rech designer brand were hardest hit. Profit before interest from Courtauld's branded clothing division dived from pounds 5.9m to pounds 600,000. The cost of sorting out Georges Rech contributed to an increased charge for reorganisation. The company set aside pounds 7.6m in 1993 compared with pounds 6.8m the previous year.

Full-year pre-tax profits were flat at pounds 38.8m for the year to December against pounds 39.1m last time. Profits from the UK, North America and the rest of the world all rose strongly. But on the Continent the company lost pounds 900,000 against a profit previously of pounds 5.1m.

The results cover the closing months of the stewardship of Martin Taylor, the outspoken 41-year- old who is now chief executive of Barclays Bank.

His successor, Noel Jervis, said: 'The results were affected sharply by the full weight of economic recession in the main markets of Germany, France and Spain.'

Profits also suffered from a reduction in the pension credit from pounds 4.8m to pounds 1.3m. There will be no credit in the current year.

The group also benefited from an increase in sales to Marks & Spencer and strong sales of lace and stretch fabrics in the US.

Mr Jervis warned that the recession in Europe would continue to depress the group's performance in 1994, but he added: 'There is evidence of a continuing recovery in the UK and US economies.'

Earnings per share were down 3 per cent at 29.2p. The dividend, however, was increased by 4 per cent to 14.2p. The shares rose 3p to 571p. The stock has recovered most of the ground lost in December when it issued a profits warning.