30th Jun 2014 08:40
LONDON (Alliance News) - Horticulture products company William Sinclair Holdings PLC Monday said its losses widened in the first half, after what it called a "challenging" year. But the company also said it agreed a final compensation for its Bolton Fell rights.
William Sinclair shares were quoted up 30% at 68.00 pence Monday morning.
The company, which products horticulture products for garden centres and other customers including Tesco PLC, posted pretax loss of GBP3.7 million for the six months ended March 31 compared with a GBP1.9 million loss a year earlier.
Revenue crept up to GBP21.8 million from GBP20.4 million a year earlier.
William Sinclair said trading conditions during the period were "challenging", and this was made harder by a refinancing which forced it to put its strategic plans on hold for four months.
It said sales in the period were reasonable in the retail sector, with new business from a major garden centre company starting to "come on stream". However, a decision made 18 months ago in response to the shortage of peat for the professional sector to raise prices significantly has proved to have had damaging longer-term consequences, the company said. As a result, William Sinclair said trading with this sector of the market was substantially down on the previous year.
On a positive note, the company said its plans to develop its manufacturing facility at Ellesmere Port near Chester have progressed well. Additionally, the company completed a full review of all its consumer products and developed new "positioning strategies" for its J Arthur Bowers and Growing Success brands. William Sinclair said it has initiated some new products, and feedback from customers who have seen the preliminary plans has been encouraging.
The company also reached a settlement over the buy-out of its land interest and peat extraction rights at Bolton Fell and the resultant closure of the factory at the site. A tribunal case to decide the level of compensation William Sinclair was to receive from Natural England was due to start this month. However following a period of negotiations, a final settlement figure has been agreed. William Sinclair was paid GBP9 million in 2010 and the final balance of GBP12.3 million will be transferred within the next few weeks.
Looking ahead, William Sinclair said sales since the half-year have not been as strong as expected, despite the favourable weather.
"Combined with the problems within our professional division and the pressure on margins generally, full-year results are expected to be disappointing," the company said.
As the company had previously indicated, it scrapped its interim dividend. In the previous year an interim dividend of 1.5 pence was paid.
"The board intends to return to its progressive dividend policy once the restructuring of the company is complete and sales recovery is well underway," William Sinclair said.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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