COURTAULDS PROFITS RISE 17.7%, SALES INCREASE 14.1% FOR YEAR
Byline: James Fallon
LONDON — Courtaulds Textiles PLC said acquisitions and stronger sales of stretch fabrics in the U.S. contributed to a 17.7 percent rise in after-tax profits to $55.9 million (34.6 million pounds) at current exchange rates, on a 14.1 percent increase in sales to $1.7 billion (1.05 billion pounds) for the year ended Dec. 31.
In 1993, after-tax profits were 29.4 million pounds on sales of 923.1 million pounds.
Earnings per share rose 15.4 percent to 54 cents (33.7 pence).
Noel Jervis, chief executive, said sharp improvement in profits, sales and margins indicated the benefits of past restructurings and continuing operational improvements, as well as acquisitions. Acquisitions contributed $4.4 million (2.7 million pounds) to operating profits and $147 million (91 million pounds) to sales.
Courtaulds Textiles last year bought the Well hosiery and sock business in France and the U.K. hosiery business Bear Brand from Hartstone Group PLC. The previous year it acquired Galler, the Spanish and Portuguese lace company, and Gold-Zack, the broad stretch fabric business in Germany and the Philippines. Excluding acquisitions, there were modest volume increases in the U.K., continental Europe and the U.S. as those economies recovered from recession, Jervis said. Profit margins rose to 5.4 percent from 4.7 percent despite rising raw materials costs. Like-for-like operating profits rose 6 percent by $4.7 million (2.9 million pounds).
Profits rose in all the company’s divisions, while sales increased everywhere but in home furnishings. Growth in branded apparel was driven by acquisitions; the strong performance of Gossard lingerie, and good performances from Jockey U.K., knitwear company Lyle & Scott and hosiery firm Wolsey and McIlroys. The Georges Rech women’s wear business returned to profit in the second half, but its performance remained unsatisfactory, Jervis said.
In fabrics, the U.S. stretch fabric businesses saw sharply higher sales, benefiting from the continuing fashion swing toward a sleeker lingerie look. Lace sales were lower and were affected by retailer pressure for better garment prices, Jervis said. Tighter management and lower overheads helped boost profits, though, in lace as well as stretch. The company’s North American profits — including exceptional items but before interest and taxes — rose 38 percent to $18.7 million (11.6 million pounds) from 8.4 million pounds, although sales dropped 2.5 percent to $214.5 million (132.8 million pounds) from 136.2 million pounds in 1993. — Fairchild News Service