Royal Doulton slips on run-in to demerger

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ROYAL DOULTON, the china group soon to be demerged from the Pearson conglomerate, plunged into the red in the first half, according to its listing particulars.

In the six months to June, it made pre-tax losses of pounds 3.8m. This was despite turnover up 4 per cent to pounds 95m on constant exchange rates, on the back of better business in the UK and the US - an increase the company said had been sustained in the third quarter.

About pounds 1.9m of the loss was due to a provision relating to the disposal of the Canadian title the Financial Post, part of the group's pre-flotation arrangement with Pearson. At the operating level, before Pearson's management charge, the company made profits of pounds 1.2m.

Royal Doulton's business is highly seasonal, and the company said the outcome for 1993 as a whole would depend on the Christmas quarter. However, Mark Burrell, chairman, acknowledged that the past three years' trading had been difficult. Revenues have been steady at about pounds 200m a year, but operating profits halved from pounds 21.9m in 1990 to pounds 10.9m in 1993, while pre-tax profits shrank from pounds 17.6m to pounds 3.9m.

The group said the shares would attract a 3p net final dividend, giving a 6.6p notional dividend for the year.

Pearson is demerging Royal Doulton, the world's largest manufacturer and distributor of premium china and giftware, through a share split. Every Pearson shareholder on the register at the close of business on 1 December will receive one Royal Doulton share for every 10 Pearson shares held.