The Chairman of Lambert Howarth, the Marks & Spencer supplier which issued a profits warning in June, is to stand down with immediate effect. Robert Garfit will give up his executive duties and be replaced by Fred Vinton, currently a non-executive director. Mr Garfit will leave the board at the group's annual meeting next year.
The changes came as the group announced a sharp fall in profits and a cut in the dividend. Pre-tax profits in the six months to June fell to £2.2m before exceptionals compared with £4.5m in the same period last year.
Lambert Howarth makes shoes and household products with 70 per cent of its output going to M&S. It has suffered as a result of the decline in fortunes at M&S though it has been trying to diversify. It acquired non-M&S related businesses and sold its safety footwear business for £1.7m. It has also closed one of its homewares businesses. The group will now concentrate on shoes, accessories and soft textiles for the home. It still supplies approximately two thirds of M&S ladies' footwear.
The company said trading conditions in the first half had been weak with poor demand and sustained pressure on margins. The board said it expected these conditions to continue for the rest of the financial year. Commenting on the outlook Mr Garfit said: "Whilst it is disappointing to report a downturn in our profitability in the first half of the year, sales have held up well albeit at the expense of margin. Further actions are being taken to cut cost. We remain well placed to take advantage of any upturn in demand by our major customers."
Group sales rose by £6.3m to £65.6m. But exceptional charges of £7.3m including a £5.5m loss from the discontinued businesses dragged the group to a pre-tax profit of £2.2m. The interim dividend was cut to 3p per share from 4p the previous year. The shares closed a penny lower at 109p.Reuse content