Stoves blames pound as imports erode earnings

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The Independent Online

Stoves, the maker of cookers, yesterday blamed the strong pound for a collapse in its profits, which has forced the company to axe its final dividend.

Stoves, the maker of cookers, yesterday blamed the strong pound for a collapse in its profits, which has forced the company to axe its final dividend.

Shares in Stoves fell 15 per cent after the beleaguered manufacturer said it would not be recommending a final payout in order to preserve cash within the business to aid its recovery.

The shares slipped 5.5p to 30p yesterday, compared with a high of 330p three years ago.

Although sales reached a record £102m in the year to May, pre-tax profits fell from £865,000 to just £55,000 due to falling prices and competition from cheap imports from continental Europe.

John Crathorne, chief executive, said: "This highlights the pressures facing domestic manufacturers in a market in which imports have had such a currency advantage."

Stoves said cheap imports from the Continent had made large market-share gains at both the top end of the market and the budget sector. It said that the freestanding electrical cooker market had seen prices fall particularly sharply, with low-cost imports now accounting for half the market.

To fight back, Stoves has strengthened its management and reorganised production facilities. The Warrington plant was temporarily closed in the first half and the number of direct employees reduced by 50 per cent in the second half. New systems and a lower-cost manufacturing platform are also being introduced.

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