Tight margins send Gardiner into profit fall at Gardiner

Gardiner Group, the security equipment manufacturer, reported a 12.5 per cent fall in profit before tax to £3.5m for the year to the end of October.

Problems at the company had been flagged at the interim stage and yesterday's figures were in line with City expectations. The company blamed a squeeze on margins at GSL, its intruder alarms subsidiary.

Gardiner hopes to turn its fortunes around by concentrating on closed-circuit television equipment in all its markets as well as expanding its intruder alarms business in Europe. The company accepts that its traditional market in the UK for these alarms has matured, offering little scope for further profits growth.

Richard Clemons, chairman, said: "We had a very tough 1994, but we are very excited about the longer-term possibilities."

He said people realised closed-circuit television was an effective deterrent to crime. "People are less concerned about the big brother aspect. Picture quality is improving, and we have already seen a big increase in demand for CCTV."

Turnover was up slightly to £80.5m from £78.6m. Earnings per share were 2.17p, down from 2.23p. The dividend is 0.8p net, up slightly from 0.73p.

The shares closed 3p up on the day at 18p.

Hoare Govett has pencilled in £4m for next year, which gives a prospective price-earnings ratio of 6.8.

City analysts say the stock is cheap because of adverse sentiment about the company's chequered past.

One analyst said: "The company still has a lot to prove. It must show it can achieve organic growth. The City won't accord it a proper rating until we see that."

The company said trading so far this year had been encouraging, and with the new strategy in place, it had renewed confidence in its future.