Faith moves Everest to lift interim on poor half

EVEREST FOODS demonstrated confidence in future profits yesterday by lifting the interim dividend in the face of falling sales and a collapse in earnings, writes Patrick Hosking.

The shares rose 6p to 133p as the West Midlands chip maker raised the interim payout from 1.1p to 1.2p.

Group sales fell by 10 per cent to pounds 16.1m in the six months to 30 November. A heavy investment programme disrupted production of frozen foods, including chips. Selling prices also slipped.

Pre-tax profits declined from pounds 1.8m to pounds 1.2m despite the pounds 4m cash injection in November 1991. The interest bill was halved to pounds 150,000, but earnings per share plunged from 5.85p to 3.15p.

The worst-hit division was egg production, where profits collapsed from pounds 265,000 to pounds 38,000. Overcapacity in the industry hit prices while there were also teething problems with new technology. Bob Gilbert, chairman, said there were signs that egg prices would increase.

Frozen chip capacity has been increased by 50 per cent. The chilled chip line is now in service. It has started supplying jacket potatoes to one supermarket chain and is producing frozen jacket potatoes for the catering trade.