TEXTILES group Lamont Holdings plunged into the red last year due to heavy losses suffered on disposal of its carpet business and further losses at Moygashel, the linen concern based at Dungannon, Co Tyrone. But Lamont shares rose 5p to 141p on confident boardroom comment indicating that all operations, including Moygashel, are now trading profitably, cash generation remains strong and gearing is set to decline.
Unchanged total dividend payments of 12.8p are covered 1.3 times by earnings from continuing operations. Last year's sharp decline into loss involved an £18 million downturn from 1995 pre tax profits of £9.7 million to 1996 losses of £8.6 million. Turnover fell £3 million to £122 million. Most of the £18 million slippage was due to £11.6 million in disposal losses and goodwill write offs at tufted carpet maker - Shaw Carpets in Yorkshire, an off shoot sold to its management for £1 million in December.
Trading losses before disposal were £2.6 million. But Moygashel was also a loss maker. Analysts estimate it continued to suffer annual losses of around £1 million on turnover above £20 million as the Irish linen market continued to suffer from the aftermath of the 1994-95 boom conditions.
In a move designed to eliminate surplus capacity, Moygashel has closed its linen plant in Estonia acquired only three years ago. Its overseas selling operation in the US and Europe has been reorganised.
Lamont's chairman, Mr Paul Vaight, said: "The prospects for Moygashel going forward appear much brighter."
Losses at Shaw and Moygashel overshadowed positive results at the group's Northern Ireland Carpets and B. H. McCleery carpet yam business at Newtownards, Co Down, where operating profits surged £1.34 million to £2.46 million on turnover up £360,900 at £23.98 million. Ongoing investment is being made to maintain the competitiveness of the Northern Ireland carpet and yarn activities in the face of the strong competition caused by surplus manufacturing capacity in Europe.
Elsewhere, the group's Bonded Fibre Fabric offshoot achieved "broadly similar" profits and turnover. But final quarter demand was less than in previous years at the Alexander Drew furnishing fabrics business. While the 1996 profit and loss account looks miserable, cash generation from continuing operations remained strong at £20 million.
But although all operations are now trading profitably, Mr Vaight warned that the strength of sterling has reduced competitiveness in certain key export markets and increased the attractiveness of certain products imported into the UK.
