THE strength of sterling has adversely affected the competitiveness of Lamont Holdings' products, the chairman Dr Paul Vaight, told shareholders at yesterday's annual general meeting in London. However, this has been partially offset by savings in the costs of certain raw materials.
Moygashel, the linen subsidiary, based at Dungannon, Co Tyrone, which continued to record losses last year, now has a healthier order book, said Dr Vaight, despite the strengthening of sterling against the dollar. Northern Ireland Carpets, another subsidiary, increased its sales by 10 per cent in the first four months of this year. This is seen as "especially encouraging when viewed against the increased competitiveness of the sector, in particular Belgian carpet manufacturers who have a price advantage due to currency movements", the shareholders were informed.
Lamont has already sold the net assets of Shaw Carpets. It is now negotiating the sale of the warehouse attached to the Shaw Carpets' factory. This is expected to be concluded "in the near future
The chairman noted that the rejection of the proposed duty recommended by the Eurnpean Commission on imported greige cloth from certain countries had removed a potential additional cost which had concerned a number of Alexander Drew's customers. The "activity level" at Drew has continued at the same level in the first quarter but some of the benefits from improved operational efficiencies are beginning to come through.
The main focus for 1997, Dr Vaight said, continues to be the "delivery of performance improvement, based on the achievement of clear targets focused on our own efforts". In the first four months "good progress has been made towards these targets", and the chairman stressed that the group is "determined to sustain this progress to ensure improved progress across the group". However, the benefits are not expected to come through until the second half.
Lamont recorded losses of £8.6 million in 1996 compared with a profit of £9.7 million in 1995. These losses were due to heavy losses suffered on the disposal of its Shaw carpet business and further losses at Moygashel.
