LIG suffers from holiday snaps slump

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RECESSION has taken its toll on London International Group. Pre-tax profits at the condoms and photo-processing company rose from pounds 16.9m to pounds 27.8m in the year to March. But after stripping out exceptional items, underlying profits fell 18 per cent to pounds 32.5m against pounds 39.4m on turnover up from pounds 398m to pounds 416m, writes Gail Counsell.

Behind the poor performance was a sharp fall at the ColourCare division, which was hard hit by the reluctance of consumers to spend money on holidays and hence on film processing.

The division plunged from a pounds 5.9m profit to an operating loss of pounds 3.9m.

The company argues that its problems are those of the whole of the photographic industry. Reduced demand had led to overcapacity and to significant price pressures, it said.

Until that capacity was reduced, prices would remain under pressure. Industry estimates suggest that volumes this year are likely to remain unchanged, but the group said it was waiting to see how things turn out in the holiday months of July to September, which usually account for around 40 per cent of turnover.

LIG's health and personal products division, which accounts for more than two-thirds of total turnover, performed relatively well, with operating profits up by a fifth to pounds 51.4m.

The group's share of the branded world condom market grew to more than 35 per cent, in the face of generally sluggish growth in the market.

The final dividend is maintained at 6.25p. The results were at the low end of expectations and the shares slipped 6p to close at 176p.

(Photograph omitted)