Work for M&S helps Baird hold profit level

An increase in profits from making clothes for Marks & Spencer meant that William Baird, the textiles concern, managed to hold its overall profits level, writes Robert Cole.

For the year to 31 December Baird made operating profits of pounds 24.7m, compared with pounds 24.5m in 1992.

However, Baird's profit margins were eroded. Although operating profit was almost static, turnover in continuing operations increased.

Pre-tax profits looked substantially improved because Baird's figures last time were depressed by an exceptional charge.

Taxable profits were pounds 19.6m, up from pounds 14.2m.

Making clothes on contract - mainly menswear and lingerie - won greater turnover and better margins. Operating profits here, where M&S is the largest customer, rose 28 per cent to pounds 9.4m.

The integration of Richard Racke, a contract clothier bought in August, also helped.

Sales grew by 17.6 per cent to pounds 230m and the operating profit margin widened from 3.7 to 4.1 per cent.

Profits from making branded clothes slipped from pounds 12.2m to pounds 11.3m, hit by problems at the Berketex dress operation.

During the year Baird sold its Darchem engineering business. Donald Parr, the chairman, said: 'We want to concentrate on clothing and textiles.'

Mr Parr does not expect that conditions in the UK market will be helpful in the near future. 'It appears unlikely that the present slow recovery will offer much assistance in the first half of the year,' he said. 'However, the group is placed to benefit from any increase in UK consumer spending.'

Baird has held its dividend for the fourth year in a row at 8.9p. However, the payment was uncovered by earnings per share in 1992. Cover was re- established in 1993. Earnings were 10.9p, up from 8.4p.

The shares fell 5p to 239p.