The Investment Column: Pound deflates LIG's growth
Friday 28 November 1997
However, it only made it by the skin of its teeth. Pre-tax profits for the six months rose 13.7 per cent to pounds 10.8m, but earnings per share were up just 10.4 per cent .
LIG's growth has been held back by the strong pound, which depressed profits by pounds 300,000. Heavy capital investment involved in creating the new super-thin Avanti condom and costs associated with the phasing out of its production of powdered examination gloves in the US in favour of powder-free alternatives also hindered the group's progress.
Sales were actually down a touch in sterling terms to pounds 155.6m but costs were sharply down, allowing operating margins to rise from 7.9 per cent of sales to 8.9 per cent.
The performance of the condom and glove business remains encouraging with sales up 7 per cent to pounds 119.1m despite the currency hit.
However the jury is still out on the success of Avanti. Initial sales are going well but it is unlikely to make a significant impact on profits in the short term.
There is also a question mark hanging over the health and beauty business which continued to decline. LIG will probably be forced to dispose of some of the worst performers in the division to get profits moving in the right direction again.
Analysts are still forecasting full-year profits of around pounds 41m, which on yesterday's price of 156p, down 1.5p on the day, puts the group on a prospective multiple of 19.
Given concerns over health and beauty and sterling that looks expensive. High enough.
- 1 Kermit the Frog has a new girlfriend named Denise
- 2 The excuses your boss is most likely to believe when you call in sick
- 3 Moscow voted the world's unfriendliest city
- 4 I'm pansexual – here are the five biggest misconceptions about my sexuality
- 5 More than 11,000 Icelanders offer to house Syrian refugees to help European crisis
The one chart that shows how George Osborne is almost certainly going to be our next Prime Minister
The excuses your boss is most likely to believe when you call in sick
Three-year-old ultra-Orthodox Jewish children told 'the non-Jews' are 'evil' in worksheet produced by London school
Bono's group has made more money from Facebook investment than from all his music
Wikipedia rocked by 'rogue editors' blackmail scam targeting small businesses and celebrities
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
iJobs Money & Business
£14000 - £16000 per annum: Recruitment Genius: This company was established in...
£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...
£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum: Recruitment Genius: We are a vibrant and establishe...