Liberty under fire after profits dive

BRIAN MYERSON, the South African entrepreneur stalking Liberty, launched a fresh attack on the retail group's management after it reported a collapse in first-half profits yesterday.

Pre-tax profits fell from pounds 1.65m to pounds 648,000 in the six months to 1 August on sales of pounds 36.4m, down 5 per cent. Losses in the retail division, which includes the flagship store in Regent Street, London, doubled to pounds 1.1m.

Mr Myerson said: 'We are extremely disappointed. The results entirely vindicate our concerns about the way the group is run.'

Mr Myerson was heavily defeated when he called for a shake-up of the Liberty share structure and changes in the boardroom at an extraordinary meeting in May.

Since then he has continued to buy shares and now holds 15.6 per cent of the voting stock. Most of the voting shares remain in the hands of the founding Stewart- Liberty family and their allies.

Mr Myerson said: 'Some people will now be scratching their heads and wondering whether we weren't right.'

John Pugh, Liberty's finance director, defended the performance yesterday, saying: 'It is a very tough retailing climate.'

He said other retailers were also reporting falling profits and Liberty usually made most of its profits in the second half, which includes Christmas.

Liberty is holding the interim dividend at 1.85p by dipping into its reserves. The tax charge leapt from 40 to 60 per cent because of high tax in Japan, where Liberty is expanding.

My Myerson, who is sitting on a pounds 3m capital loss on his holding, also referred to Harry Weblin, Liberty's chairman, who sold 6,900 shares - one-third of his holding - in July.

Mr Pugh said the disposal did not reflect a lack of confidence in the business and added: 'He needed the money to buy some land next to his house. There is never a good time to sell shares.'

Liberty also warned: 'The directors cannot be confident, in the current depressed conditions, that trading in the second half will reach the level achieved last year.' It expects no growth in its core sectors until well into 1993.