LONDON (Alliance News) - Swallowfield PLC Thursday reported a drop in revenues, and a loss in the financial year ended June 30, as a pick up in the second half of the year failed to offset losses in the first half of the year.
The cosmetics, toiletries and household goods supplier said that although the business returned to a break-even position in the second half, following an improvement to its cost base and new business wins, it was not sufficient to recover previously reported losses in the first half.
Swallowfield did not propose a final year dividend, which means its annual dividend dropped to 2.2 pence, from 6.3 pence per share a year earlier.
The company reported a pretax loss of GBP1.2 million in the 12 months to June 30, compared with a pretax profit of GBP1.6 million a year earlier. It reported a net loss of GBP815,000, compared with a net profit of GBP1.3 million a year earlier.
Swallowfield said revenues fell 16% to GBP48.6 million during the year, from GBP57.9 million a year earlier, as a result of changes made in the sourcing strategy of its three main customers, which now represents 32% of total revenue, having reduced the concentration of its customer dependency and improved its risk profile.
It said that its strategy to increase direct export revenue is succeeding, with direct exports up 34%, now representing 35% of total revenue.
The company also said that a number of customer wins in the second half of the financial year should contribute to future profitability.
"Whilst we expect the UK and European economies will remain fragile for at least the next 12 months, we are building momentum with regard to new customer wins, new product launches and realignment of the cost base. We anticipate the new fiscal year will be one of stabilisation, focus and returning the business back to profitability," said Chairman Brendan Hynes in a statement.
Swallowfield shares were down 2.0% at midday Thursday, trading at 80.85 pence per share.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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