20th Dec 2005 07:00
Swallowfield PLC20 December 2005 Swallowfield plc Trading update and move to AIM Swallowfield, the specialist manufacturer of a wide range of household goods,cosmetics and toiletry products, announces that half-year and full year profitsare likely to fall significantly below current market expectations. The Boardanticipates that the Group will report a loss for the first half of the year andbe breakeven, before the restructuring costs discussed below, for the year as awhole. The second half of the year is expected to see improved trading and willbenefit from the actions being taken. The business background has continued to deteriorate, particularly in the lightof the increasingly weak retail environment. Competitive pressures have limitedour ability to pass on the increased costs that industry is currentlyexperiencing. Additionally, we have incurred £0.1m of non-recurring costsassociated with an aborted acquisition, and we anticipate an annual, non-cashcost of £0.15m arising from the effect of compliance with InternationalAccounting Standards. In the light of these reduced expectations the Board considers that it would beprudent to support the balance sheet at this time and has therefore decided notto declare an interim dividend. The Company will shortly finalise a comprehensive reorganisation andrationalisation programme across the entire business. This will encompasspricing, products and their attendant profitability, procurement, production andthe overall management structure. This will lead to a leaner and more focussedcompany and is expected to generate annual savings of £0.6m in the medium termand will incur a restructuring charge during the current year of approximately£0.5m. In view of the size of the Company, the Board has decided that it would beappropriate to transfer the listing of the Company's shares to AIM. Further announcements on these subjects will follow in due course. Notes to editors: Swallowfield formulates, manufactures and packages fine quality household goods,toiletries and cosmetics across the whole spectrum of consumer markets for ownlabel and brand names Enquiries: Tony Wardell, Group Managing Director, Swallowfield plc, 01823 662241 Barrie Newton, Rowan Dartington & Co., 0117 9330011 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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