Cash boost for Carpenter after ‘challenging year’
Underlay, bedding and foam company Carpenter was able to boost its level of cash by almost £10m last year, despite a 'challenging year' including being hit by a £23.7m bill as part of the EC's €75m price fixing fine.
The company saw UK sales fall from £78.14m to £75.13m. Total sales dipped from £87.47m to £86.27m but gross profits rose from £18.4m to £18.58m.
However Carpenter's £23.7m portion of the €75m fine imposed on its parent group for being part of a price fixing cartel saw a pre-tax profit of £8.72m become a loss of £13.93m.
'2013 was a challenging year and whilst total turnover fell when compared to the previous year, largely due to the closure of the bonded fibre operation at the end of 2012, like for like sales in most areas of the business continued to grow. The most notable exception was in retail sales where the company incurred a significant bad debt and direct-to-retail turnover suffered as a result. The company continued to decline business where selling prices had been driven to unrealistic and unsustainably low levels,' says the company's accounts.
'As reported last year, in the early part of 2013 primary raw material costs increased and were further exacerbated by an unfavourable Euro/GBP exchange rate. Although sterling strengthened in the mid to late part of the year, overall costs were higher than the previous year.
'The underlying financial performance of the company was as expected and on a par with the previous year. However, the company incurred a significant exceptional cost of £23.7m as a result of a settlement following a regulatory investigation into the industry resulting in a loss for the year. Despite this setback, the balance sheet remains strong and positive cash is generated from the company's operational activities.'
Carpenter, which employs more than 300 people in the UK, saw cash increase from £30.8m to £40.18m. Carpenter paid the £23.7m fine in April 2014.