Silentnight issues its fourth warning and axes dividend
Silentnight, the beds and furniture group, yesterday issued what amounted to its fourth profits warning in the past six months and axed its interim dividend after losses spiralled.
The group also warned that its results in the second half would be hit by "more challenging" trading conditions across most of its businesses. The news sent its shares tumbling to their lowest level in more than 10 years before recovering slightly to close down 8 per cent at 122.5p. In May, they traded at 257.5p.
Silentnight, which has had a tumultuous few months after a failed bid to take the company private, reported pre-tax losses for the six months to 3 August of £7.1m. This compared with a profit of £5.4m the previous year. Turnover fell by 7 per cent in the same period to £138.2m.
The company is emerging from a recent boardroom shake-up after its founding family, the Clarkes, who control 50.5 per cent of the shares, forced the former chairman and chief executive to take the rap for its recent poor trading performance.
John Clarke, the deputy chairman, said: "Trading conditions have become more challenging and this is expected to have a continuing effect on our second-half results."
Earlier this month, the company warned it would miss market forecasts for the full-year, although it said group profitability should not be below £5m before exceptionals.
Yesterday, Mr Clarke said the company faced another £1.1m in one-off costs in the second half, due to compensation for the ousted directors and fees to its advisers KPMG and Collins Stewart. The fees cover the company's defence against an £89m bid from the Clarke family trust, Famco, which was rejected as "unacceptably" low.
Silentnight is still looking for a new executive chairman to replace Keith Ackroyd. It expects to name a replacement within the next few months.
The group said that while sales of beds held up, the poor performance of its furniture division dragged operating profits before exceptional items down by 60 per cent to £2.3m.
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