Plans to de-merge the Viyella clothing division employing 2,000 people in Northern Ireland have been postponed by the Coats Viyella group following a severe collapse in first-half trading.
Losses of £30 million sterling, after all charges, were suffered in the first six months of the year compared with £24 million in the same period last year prompting directors to reduce the interim dividend from 3.7p to 1.5p.
Coats Viyella shares fell 7p to a new all-time low of 40p - well down from the past year's high of 140p - after a gloomy boardroom statement offered little hope of much improvement in profitability till beyond 1999.
Figures recite a litany of financial woe. With turnover falling 8 per cent to £1.04 billion, operating profits fell 25 per cent to £49 million with sterling strength accounting for £5 million of the profit decline. Reorganisation charges cost £16.5 million and closures cost another £29 million leading to a reduction in pre-tax profits from £41.5 million to £1.6 million.
As if that were not enough, the group's tax charge increased from £13 million to £28 million after a one-off provision of £20 million in relation to Advance Corporation Tax (ACT) due to changes in the last British budget.
