Operating losses at cosmetics and toiletries group IWP have widened to €14 million, as difficult trading conditions in European personal care markets led to a 9.5 per cent drop in its turnover in the year ending in March.
The group, which delisted in March 2006 after a major financial restructuring, has also been forced to close its Canadian gift business, Burlington Toiletries International, due to "particularly difficult market conditions".
Group turnover fell to €164.2 million, down from €181.4 million the year before. The operating loss of €14 million compares to an operating loss of €3.6 million in its previous financial year. However, the group has reduced its pretax loss to €21.2 million down from €33.9 million in the year to the end of March 2006, when large exceptional items exacerbated the loss.
The group balance sheet shows net liabilities of €5 million, but chairman Nick Butt said this could be eased by changing an "anomaly" in how its 35 per cent stake in household products firm Jeyes Holdings is treated in its accounts.
The recent disposal of its Royal Sanders business in the Netherlands to management and a proposal to raise further equity will also strengthen the group balance sheet, Mr Butt said. No dividends will be paid to shareholders.
The board of directors said the UK businesses had endured a "disappointing" year with margins squeezed and turnover falling by 14 per cent.
The managing director, sales director and finance director of the UK business have all been replaced and a new marketing director has been appointed.
The group moved its head office from Dublin to Skelmersdale in Lancashire last year, but its Skelmersdale factory underperformed during the year, resulting in "poor customers service" and lost sales in its Collection 2000 and Constance Carroll cosmetics brands.
Sales also fell as a result of a de-stocking of Collection 2000 in some retail outlets and the need to change its overseas distributors.
IWP said it had made good progress strengthening its retail position in Poland, where sales grew by 13 per cent.
