SHARES in steel products distributor Brown & Tawse Group fell 19p to a
new low of 44p yesterday, after sharply higher losses of #36.5m were
reported.
Equally disturbing was that it warned that a return to profits would
be a significant task.
Finance director Phillip Ashforth resigned on Thursday, with Ian
Harding from Williams Holdings named as his replacement.
A year ago the company made pre-tax losses of #980,000. The increase
was said to be due to further problems on obsolescent stock, computers
and poor controls on buying.
It has also written off #14.6m of goodwill on acquisitions, to bring
this into line with new accounting standards.
Chairman Don McFarlane stated that market conditions remained well
below those experienced in the 1980s. He said every effort was being
made to ensure a return to profitability within existing conditions.
''Although it would be rash of me to claim that all the skeletons are
now out of the cupboard, I believe that a thorough job has been done to
ensure that the March 1993 balance sheet reflects an accurate picture of
the true value of the group's assets and liabilities,'' he said.
Mr McFarlane was able to point to the #2.9m disposal
of Jay Fasteners to building materials group Lilleshall as a positive
move.
No dividend is being paid although a 4.7p payout was made last time.
Losses were equal to 111.2p a share from 2.7p. Turnover improved from
#117m to #133m. Five years ago it was #165m with #9.6m pre-tax profit
resulting.
The company did warn last March that it expected losses of #20m. At
that time it unveiled
a management clear-out and major restructuring plan.
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