COURTAULDS NET FELL 23.7% IN ’95
Byline: James Fallon
LONDON — Courtaulds Textiles PLC cited poor retail conditions in the U.S. and unusually warm weather in Europe, as it reported after-tax profits fell 23.7 percent to $40.3 million (26.4 million pounds) at current exchange. Sales rose 6.3 percent to $1.71 billion (1.12 billion pounds) in the year ended Dec. 31.
The results compare with after-tax profits of 34.6 million pounds on sales of 1.05 billion pounds the previous year. Earnings per share fell 24.6 percent to 39 cents (25.4 pence) from 33.7 pence. Figuring in the after-tax profit decline was a loss of $6 million (3.9 million pounds) on a business sale, and an $8.1 million (5.3 million pounds) loss on discontinued operations. A year earlier, the loss from discontinued operations was 600,000 pounds.
Noel Jarvis, chief executive, said cutbacks in retail inventories were a major problem following an unusually hot summer last year in France and the UK.
Most of the firm’s business in the U.S. is in stretch fabrics and lace. Stretch fabric sales continued to gain last year, Jarvis said, but lace sales “declined due to fashion trends and retailer pressure on garment prices. Demand fell away at the end of the year as retailers and garment makers reduced stocks in response to lower than expected retail sales.”
Courtaulds Textiles wants to expand its business in the U.S. and is in the middle of an experiment to supply private label lingerie to retailers there. It increased its investment in the project during the year, Jarvis said, adding that total development spending last year was $6.2 million (4 million pounds) covering projects in France and China as well as America.
Despite the difficulties in the U.S., Courtaulds Textiles said its fabrics division had a 9.6 percent increase in operating profits to $38.5 million (25.2 million pounds) from 23 million pounds on a 10.4 percent rise in sales to $637.2 million (417.1 million pounds) from 377.9 million pounds.
In branded apparel — which includes Georges Rech, Well socks and Gossard intimate apparel — operating profits rose 26.5 percent to $13.33 million (8.6 million pounds) on a 17.3 percent increase in sales to $386.26 million (249.2 million pounds). This compares with operating profits of 6.8 million pounds on sales of 212.5 million pounds in 1994. The company said Georges Rech “made a significant advance helped by stronger designer clothing markets in continental Europe” but the socks and hosiery markets remained difficult because of the warm weather and operational problems.
Private-label apparel manufacturing, mainly for Marks & Spencer PLC, had a 4.4 percent drop in operating profits to $26.97 million (17.4 million pounds) from 18.2 million pounds. Sales rose 9.1 percent to $518.94 million (334.8 million pounds) from 306.8 million pounds. Knitwear, casualwear and sock sales were hit by the warm weather in the UK, although men’s underwear saw significant growth, the firm said.
Spinning operations posted a loss of $306,000 (200,000 pounds) against a profit of 2.2 million pounds a year earlier.