LONDON (Alliance News) - Household and beauty products company Swallowfield PLC Thursday said it swung to a pretax profit in its last financial year, having spent the last 12 months trying to re-stabilise the business and invest in future growth.
The cosmetics, toiletries and household goods supplier reported a pretax profit of GBP140,000 for the year ended June 30, compared with a GBP1.3 million loss last year.
It generated GBP50.0 million in revenue during the year, an uptick when compared with GBP48.6 million a year earlier. The company said underlying sales growth was driven by good innovation and new contract wins.
The company booked lower finance costs and exceptional charges in the just ended, all of which it said helped it swing to a profit.
"Product category focus and cost savings already made contributed to a margin improvement of 1.9 percentage points," it said.
The company has been beset by a number of problems in recent times including contract losses. As a result the company waived its interim dividend for the 28 weeks ended January 4. Swallowfield said its confident in making progress in what it said remains a "challenging and competitive market."
"We expect the challenging retail market conditions currently being experienced in the UK and Europe to continue in the short and medium term. However, the board remains confident that the new strategy outlined earlier this year will gain further momentum, improve profitability and continue to build shareholder value. In addition, the new financial year will benefit from improved run rate profitability, further efficiencies, tighter control of working capital and new product developments already progressed in the current financial year," the company said in a statement.
The company did not pay a dividend for the year, having paid a dividend of 2.2 pence per share the year before, as it invests in future growth.
"These will require investment both in working capital and brand marketing / promotional support. Through this period of investment the dividend policy is expected to be relatively conservative," it said.
The company said it will reinstate a dividend and will align the level of dividend payment to the underlying earnings and cash flow of the business.
Swallowfield shares were trading 2.5% lower Thursday morning at 92.66 pence.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.