Kleeneze fails to clean up as losses hit pounds 9.2m.
Doorstep catalogue retailer Kleeneze yesterday posted half year pre-tax losses of pounds 9.2 million and said that turnover in its core door-to-door sales business had fallen two per cent to pounds 42 million.The Swindon-based group, which sells mops, dusters and other household and personal care products, described the fall in sales at Kleeneze UK in the six months to October 31 as 'disappointing'.
Despite an improved format for its main catalogue, it was not enough to keep many door-to-door distributors pounding the pavements in the name of cleanliness. The number of distributors employed by the division who placed regular orders fell eight per cent to 9,400.
Overall the group posted an eight per cent increase in operating profits from ongoing operations to pounds 2.8 million as turnover on the same basis rose two per cent to pounds 75.6 million.
But it racked up exceptional costs and operating losses of pounds 11.8 million during the period, which it said arose primarily from the sale of its display marketing business DMG in July.
That led to bottom line losses of pounds 9.2 million against pounds 22 million last time.
Chief executive William Rollason said Kleeneze UK, which boosted operating profits by three per cent to pounds 3.2 million, had launched programmes to improve recruitment and retention of distributors.
The division plans to introduce more seasonal catalogues in 2004 following the success of a Halloween catalogue, he said.
A new health and beauty catalogue achieved significant growth and further expansion of the product range is also being considered.
Mr Rollason added that Kleeneze was continuing to focus on improving performance at its Farepak business, which provides Christmas hampers, gifts and shopping vouchers on a monthly instalment basis through catalogues.
Farepak made flat operating losses of pounds 400,000 on first half turnover of pounds 33.6 million, up from pounds 31.3 million last year.
But Mr Rollason said the group had 'been restored to a sound basis' -reflected in its decision to resume dividends to shareholders with a 1p interim payment.
'Overall, we believe our expectations for the full year will be met,' he said.
Although share prices fell at the results, one broker said the firm was starting to see the benefits of running a leaner operation.
Shares closed down 11p at 145p.
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| Title Annotation: | Business |
|---|---|
| Publication: | The Birmingham Post (England) |
| Date: | Dec 18, 2003 |
| Words: | 390 |
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