The first half of the current year has proven an exceptionally challenging period for the Group, as a combination of poor weather for much of the summer and higher interest rates hit consumer confidence and spending.
Total Group sales fell 17% to £6.97m (2006: £8.42m) and we incurred a loss before taxation of £2.21m (2006: profit of £156,000) after taking a £700,000 provision against old stock.
There is no getting away from the fact that these are disappointing results. Our Chief Executive, Carol Duncumb, accepts that she and her new team have a major task ahead to convince shareholders that they can turn this business around and achieve the sort of results expected. The Board has been extremely challenging of her plans and feels confident that we now have the right team and the strategy in place to move the business forward.
The Board is taking an even more critical look at the performance of the business and expects to see results improving significantly as we go through 2008. That is not much comfort to shareholders who expected to see trading performance improve in 2007 but a more realistic expectation in light of the current market place and the significant change the Group has been going through.
Michael Hobbs, Chairman, comments: “We expect some improvement in trading during the second half, but still expect the Group to report a small loss for this period and, consequently, for the year as a whole. Nevertheless, there are some encouraging developments underway that we believe will help significantly improve our performance next year.”
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