Squeezed Bullough maintains payout

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The Independent Online
FALLING demand for office furniture and industrial heaters, particularly in France, once again took its toll at Bullough. Interim pre-tax profits plummetted from pounds 5.9m to pounds 50,000 after pounds 4.7m worth of restructuring charges.

Robert Steel, managing director, warned that these costs and a high tax charge meant final profits after tax would be less than last year's pounds 3.2m.

The charges, which will mainly cover redundancies, came on top of pounds 3.3m restructuring costs in the second half of last year. 'We have now taken everything we can foresee ourselves needing,' he said.

'Shareholders knew that something like this might have to happen but I think the extent of the drop will be a surprise.'

Bullough maintained the interim dividend at 1.75p and intends to hold the final at 4.3p.

Operating profit fell by 10 per cent to pounds 5.6m in the six months ended 30 April, but year-end operating profit is expected to top last year's figure of pounds 12.8m.

Mr Steel said the recession in France had affected demand at Atal and Reznor, respectively office furniture and industrial heating subsidiaries, far more than expected six months ago.

'Operating profit is up 50 per cent without Atal and Reznor. But it's a fairly feeble point because it's not sufficient to wipe out the bad news elsewhere.

'Atal made a profit in the first quarter and was well on for recovery but that was before the uncertainty surrounding the French election.'

He said Reznor should return to profit in the second half. Propaflor, the raised flooring business, has been reduced in size and is now close to break- even.

The shares closed down 8p at 111p.