Swallowfield Share News (SWL)

LONDON (Alliance News) - Swallowfield PLC Thursday said it returned to a net profit as planned in its first half due to lower costs, but it warned on second half earnings and waived its interim dividend.

The cosmetic and household goods supplier posted a profit of GBP36,000 for the 28 weeks ended January 4, from a net loss of GBP689,000 in the previous year, despite its revenues being largely flat at GBP25.4 million compared from GBP25.5 million in 2012.

However, on a pretax basis, the company remained in a loss of GBP24,000, but significantly improved on its pretax loss of GBP915,000 in the previous year. In both years, Swallowfield received tax credits, which improved its net profit compared to its pretax profit.

The company said customer wins and product launches have offset the drag of previously announced contract losses.

Swallowfield also lowered its cost of sales to GBP23.0 million from GBP23.5 million, lowered its administrative and commercial costs to GBP2.3 million from GBP2.5 million, and lowered its finance costs to GBP150,000 from GBP194,000 during the period.

The company said it decided not to provide an interim dividend to shareholders despite giving out a 2.2 pence dividend at the same point last year. Swallowfield said it would review its dividend strategy at the end of the current financial year "based on both the results for the full year and the future prospects for the group".

Swallowfield said its second half results are dependent on the exact timing of planned product launches, the impact of wider economic conditions and underlying consumer demand.

Swallowfield shares were down 4.5% to 85.00 pence Thursday.

By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1

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