Pentland results hit shares

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The recent strong climb in Pentland Group shares was arrested yesterday as half-year results from the sportswear and consumer products company fell short of expectations.

Profits before tax for the period to 30 June rose 5 per cent to pounds 17.6m, but analysts had been looking for a rise to around pounds 18.2m. Analysts promptly cut full-year expectations by about 5 per cent to pounds 42.5m.

Virtually all of the shortfall was due to a 50 per cent rise in the price of plastic resins, a prime material used in the electric fans made by Holmes, one of the company's US consumer products companies.

Pentland's shares, which had risen 40 per cent in less than six months, dropped 16p to 129p on concerns that it would be hard for Holmes to raise prices to counter the higher costs.

The share price fall comes just a fortnight after investors reacted favourably to the cash-rich group's pounds 7.2m purchase of Mitre, the world's leading football maker.

Frank Farrant, finance director, said there had been some over-reaction by investors to yesterday's results, which were accompanied by an 8 per cent rise in the dividend to 1.35p. He said that sales at Holmes grew 40 per cent in the first half, but "we were simply caught out by the raw material increases".

Sales of Speedo swimwear rose 20 per cent. This was largely driven by advances made by Authentic Fitness Corporation, the Speedo licensee for North America in which Pentland holds a 24 per cent stake.