Pre-tax profits were, as expected, down by half to pounds 835,000 in the year to April on sales that were static at pounds 29m. But many of the nasties look like one-offs.
The results were hit by pounds 379,000 of development losses in the Far East, which will reduce. Last year's other headaches include the loss of orders in the US, which prompted the March profits warning, and a pounds 225,000 provision for a potential duty claim in the US.
Since mid-March, new business has picked up in America and the company says it expects the division to return to normal profits next year.
In the UK, sales were static, though exports to continental Europe rose by 17 per cent as the company placed more emphasis on higher-margin products. Far Eastern losses were reduced from pounds 212,000 to pounds 167,000 after a trebling of sales to nearly pounds 1m.
The Far East is important to Borthwicks. The company is a tiddler in the worldwide flavourings and fragrances market worth around $10bn, but it can grow substantially if it can grab a share of the burgeoning Chinese market.
The company's purchase of F&C Hong Kong in 1993 was supposed to be its gateway to China but the business has so far been hampered by management problems.
Williams de Broe is forecasting profits of pounds 1.95m next year and earnings of 2.54p. At yesterday's closing price of 37p, that puts the shares on a prospective p/e of 14.6. Though there is scope for improvement, the shares are not worth chasing.