28th Apr 2014 10:37
LONDON (Alliance News) - Industrial and commercial equipment company H C Slingsby said it swung to a loss in the first half, after "fierce" competition put margins under pressure and trading failed to pick up.
The company posted pretax losses of GBP249,000 for 2013 compared with a GBP102,000 profit, as revenue slipped to GBP14.0 million from GBP14.6 million.
In light of its woes Slingsby reduced its dividend to 10 pence per share from 15 pence per share making a total dividend for the year of 12 pence down from 19 pence in 2012.
Slingsby has been struggling for some time and had warned at the time of its half-year results in September that if trading did not pick up it was set to report a loss. It said sales in September and October showed an improvement however this was not sustained and "fell away again substantially in the last two months of the financial year," while fierce price competition continued to put margins under pressure.
The firm said second-half pretax losses stood at GBP217,000 and it has now taken action to reduce its overheads significantly since the year-end. The company has reduced its workforce by 20% and has closed its manufacturing unit with all in-house designed products now sub-contracted out for manufacture to trade-only suppliers in the UK. Slingsby said the design, final assembly and commissioning of premium added value product has, however, been retained within the business.
AIM-listed Slingsby said its troubles have continued this year with sales in the first three months of 2014 down 11% on the previous period, with margins continuing to be under pressure from aggressive pricing by competitors. In addition, exceptional restructuring costs of approximately GBP180,000 have been incurred in the current year.
Slingsby said it does not expect the full benefit of its cost reductions to take effect until June which will result in reduced monthly overheads costs, which "even on the current depressed level of sales, would improve the company's monthly operating performance going forward in the second half of 2014."
Non-executive Chairman Jon Waterhouse said he was "disappointed" that the firm had incurred a loss but wanted to thank the firm's "loyal staff in these most difficult times."
The stock last traded at 370.00 pence.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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