BEMROSE Corporation's diary manufacturing subsidiary in Dalkeith reported increased losses for the first half of the year, but this did not stop the parent
company from advancing pre-tax
profits 13% to #5.1m.
Charles Letts, the Scottish-based diary manufacturer, saw operating losses widen from #2.16m the previous half-year to #2.51m this time. But the overall result for Bemrose, which includes security printing and
promotional products divisions, was more upbeat as pre-exceptional earnings rose 17% to 8.3p per share.
Chairman Rodger Booth said: ''The first half of 1998 shows much positive progress, especially in promotional products.
''This is a large and fast-growing market, and our main area of development for the future.''
Sales of corporate promotional items such as pens, wallets, mugs and baseball caps rose from #36.5m to #41.2m.
Operating profits from these
products, which are sold to business customers through
catalogues, rose 15% to #4.43m.
Booth said promotional sales were expected to increase at an even faster rate during the coming months and throughout 1999. Expansion will be achieved by both organic growth and
acquisitions, he added.
Charles Letts, which tradition-
ally records losses and lower sales during the first half of the year, increased turnover by #700,000 to #17.2m. This was the result of bringing forward production of some diaries destined for retail sale, a small proportion of the overall business.
The majority of calendar and diary manufacturing is for the
corporate promotions and gifts markets.
Although there has been little evidence yet of rising demand for 1999 products, Booth said there were signs of enhanced interest in year 2000 products, which will be on sale next year.
The security printing business, which is based largely on long-term contracts to print tickets, cheques and gift vouchers for companies such as British Rail and Marks & Spencer, made slightly higher operating profits of #3.9m, on sales which rose from #20.5m to #23.7m.
Although economic problems hit a contract to supply Russian lottery tickets, the company said it did not expect a significant adverse impact on full-year results.
Shares in Bemrose dropped 12p to 313.5p amid yesterday's falling market, despite the company's decision to raise the interim
dividend 7% to 6.15p.
FACT FILE
Interim 19981997
Turnover#82.2m#73.5m
Pre-tax profit#5.1m#4.5m
Dividend 6.15p5.75p
EPS 8.3p7.1p
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