Princedale criticised over profit reporting

The Financial Reporting Panel yesterday rapped Princedale, a mini conglomerate, for posting a profit last year when it actually made a loss.

The Financial Reporting Panel yesterday rapped Princedale, a mini conglomerate, for posting a profit last year when it actually made a loss.

In a departure from established practice, the panel criticised the wording of the statement accompanying Princedale's figures for compounding the erroneous impression given in the results.

Princedale included a £3.7m loss on the disposal of a subsidiary in the after-tax line of the accounts for the 16 months to 30 April 2000, giving the impression of a pre-tax profit of £694,000, rather than a pre-tax loss of £3.1m. The loss should have appeared before tax, although there was no impact on reported earnings per share. There is no suggestion of any intention to mislead.

BDO Stoy Hayward, the auditors who signed off the Princedale accounts, declined to comment yesterday.

The FRP rejected the company's defence that the presentation highlighted the underlying profitability of the group because the disposal related to a non-core activity. "The effect ... was compounded by certain of the comments of the chairman's report which interpreted the trend of results," the panel said.

The chairman of Princedale, Stephen Bennett, has since stepped down following a restructuring.Princedale has restated its accounts.