The Hampden Group, which owns the Texas Homebase stores and Reid Furniture, has reported a drop in profits on the back of weak sales but insists it will forge ahead with plans for new outlets in the Republic.
The half-year figures issued yesterday show that in the six months to the end of July, Hampden's pre-tax profits fell to £729,000 sterling (£847,000) from £863,000 in the same period last year due to trading difficulties.
Chairman, Mr Stratton Mills, said it has now taken action to reduce its cost structure and has withdrawn from the Roseby's textile franchise in the UK, in a bid to put the group in a stronger position next year. "The benefit of these actions should become apparent in 1999."
The pre-tax profits were further depressed by exceptional costs of £600,000 sterling associated with its withdrawal from Roseby's. Group turnover slumped marginally, declining from £21.95 million in 1997 to £21.5 million at the end of July last. It has declared an unchanged interim dividend for shareholders of 0.6p per ordinary share.
Sales were depressed throughout its stores in the Republic and Northern Ireland. In the North, sales at its household and DIY section remained flat with the company blaming recessionary pressures within that area and poor weather conditions.
Trading in the Republic was slightly better - rising by 3 per cent ahead of the previous half year - and margins improved. Reid Furniture continues to disappoint the group in the Republic though, sustaining losses in the first six months of 1998. "We remain committed to the expansion of our Texas Homebase business, particularly in the Republic and the board is actively considering proposals for new stores which may come to fruition in the coming months," Mr Mills said.
