Investment programme pays off for Alexandra

PROFITS at Alexandra Workwear, the textiles company, have nearly tripled as it reaped the fruits of a capital investment programme, writes Robert Cole.

Taxable profits for the 28 weeks to 14 August rose to pounds 2m from pounds 700,000 but this was achieved on flat sales. Improved efficiency led to expanded pre-tax profit margins of 6.6 against 2.2 per cent.

The company makes and sells a wide range of working clothes from nurses' uniforms to mechanics' overalls. It borrowed heavily just as recession hit to fund its capital investment and debt climbed to pounds 19m, equivalent to gearing of 90 per cent. The group also fell into loss.

In the first six months this year Alexandra's debts fell by pounds 2.5m to pounds 7.6m, or 34 per cent gearing.

Gerald Dennis, chairman, said trading conditions remained harsh. 'The recession is not suddenly over - every bit of work we get we have to chase extremely hard,' he said.

But the expenditure programme meant that 40 per cent of any additional turnover won in future would feed directly to profits.

The results were ahead of expectations and analysts upgraded full- year forecasts. Julia Blake, of Barclays de Zoete Wedd, revised her pre- tax estimate from pounds 4m to pounds 4.5m.

Earnings per share grew to 4p from 1.3p and the interim dividend rose 0.3p to 2.1p. The shares closed 10p higher at 178p.