The result, which also reflected cost-cutting and the closure last year of the loss-making Belstaff garment maker, was accompanied by an 8.3 per cent jump in the total dividend to 6.5p. Earnings, after eliminating the effects of Belstaff's closure, were 19.9p, against 18.8p. Shares rose 6p to 340p, and have increased from a 1992 low of 171p.
Volumes at Halstead, a floor coverings business, which accounts for two-thirds of the group's pounds 59m turnover, were down after what was described as a tough year. But Stephen Knight, finance director, said exports had grown significantly and several overseas sales offices and warehouses had been set up. Sales in the important German market remained stable, while there were increases in Australia.
A pounds 7m production line, the biggest single investment the group has made, comes on stream at Halstead at the end of the year. 'It will make the company one of the most efficient, modern and flexible manufacturing plants in Europe and be behind a major part of our growth over the next five years,' Mr Knight said. 'The developments which are planned will open up some exciting opportunities and any improvement in the economic climate can only be a bonus.'
The group's increased growth and profits came mainly from non-core operations, although Mr Knight said it had been agreed with the Stock Exchange not to disclose exact profit figures on a divisional basis to avoid alerting competitors. Of the non-core operations only Conway, the trailer business, saw a reduction in profits, although Mr Knight said the division maintained its share of a declining market.
Driza-Bone, the fashionable Australian garment company, saw a big rise in sales and profits because of export growth, especially to Japan. Polyflor, the Australian floor company, increased sales but profits remained the same. And Phoenix, a distributor of motorcycle accessories, 'enjoyed an excellent year with a substantial increase in its profits'.
Recession in world markets continues to hit areas of the group's activities, although its spread of businesses has helped to insulate it from downturns in particular regions. The strategy is to concentrate on growing exports, of which 45 per cent go from the UK into Continental Europe. 'We have not assumed there will be market growth in the UK this year,' Mr Knight said. 'We have cut back costs as far as we can and further cuts will be into the bone.'Reuse content