Hodder confident despite profit dip

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The Independent Online
Hodder Headline, the UK publishing group, confirmed yesterday that poor consumer confidence and rising costs had combined to slash profits, writes Mathew Horsman.

Pre-tax profits in 1995 plunged nearly 30 per cent to pounds 5.7m from pounds 8.2m, on sales ahead 10 per cent to pounds 88.8m.

The slide had been expected, following a profits warning in September. In the event, the collapse was less dramatic than originally feared, as earnings improved sharply later in the year . The shares gained 14p to close at 239p, on expectations of improved prospects in 1996.

Underlying the company's confidence, the dividend was increased for 1995 by 8 per cent to 6.5p a share.

Tim Hely Hutchinson, the group's chief executive, said current trading trends were encouraging. "Sales in Janaury and February were 12 per cent ahead of the same period in 1995 and other early signs are modestly encouraging," he said.

Hodder Headline led the campaign to dump the Net Book Agreement, one of the last remaining legal price-fixing schemes in the UK. The company's best-selling authors - including John Le Carre - published works outside the agreement starting in late December 1994.

The collapse of the NBA in October last year led to a boost in sales for that month, although Mr Hely Hutchinson said: "It is all beginning to settle down now."