Pentland takes pounds 30m US charge

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The Independent Online
PENTLAND, the Speedo and Kickers leisurewear group, is to take a pounds 30m charge to cover the costs of restructuring its American business.

Pentland is planning to sell or close its US fashion footwear operation, which is losing money and suffered a near-pounds 10m cash outflow last year. The division designs and distributes fashion footwear to department stores in America, but is now seen as a non-core business by Pentland.

The company will concentrate instead on its core portfolio of brands such as Ellesse, Berghaus and Mitre, as well as Speedo and Kickers. "We are taking this action because the division has not performed to our expectations," said Andy Rubin, the Pentland chief executive.

The decision was taken after a strategic review. A cost cutting programme will be implemented.

Pentland confirmed plans to quit the replica football kit market, which has been declining. Its Pony brand sponsors the kits of Premiership football clubs Tottenham Hotspur, Southampton and West Ham.

These contracts will be honoured but will not be renewed as a result of increased losses at Pony UK. Other clubs affected include Norwich, Oldham and Huddersfield.

The news came as Pentland announced a 20 per cent rise in first-half pre-exceptional profits to pounds 17.4m. There was a pounds 2.9m charge to cover the costs of making the group's computer systems year 2000 compliant. Trading in the first half was difficult in the UK and Asia, the company said. It is also cautious on prospects for the second half.

Among Pentland's main brands, Speedo was hit by soft demand in Asia and the strong pound. Ellesse made progress in the UK and Europe but also experienced a Far East impact. Kickers footwear was affected by stock rundowns by retailers which had over-ordered.

Pentland has net cash of pounds 136m and is looking for acquisitions, although it is not currently in talks.

Group first-half sales fell from pounds 316m to pounds 252m as a result of disposals. The interim dividend was 1.54p per share against 1.47p last time. The shares closed down 0.5p at 79p.

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