IWP International warned yesterday that earnings in the year to the end of March would fall short of market expectations due to difficult trading conditions since Christmas.

The company also announced plans to close its head office in Dublin and relocate to Skelmersdale, outside Liverpool, where its Constance Carroll business is based.

The decision to close its Irish head office, which will affect seven people, will increase the exceptional costs that will be incurred by the group in the current year. Along with additional refinancing costs, the costs associated with the closure are expected to result in a once-off charge of €6 million compared to analysts' expectations of around €3.7 million.

The company, which manufactures and distributes personal care and cosmetic products in the UK and continental Europe, said that while second half earnings were significantly ahead of the prior year, they were not as strong as it had anticipated with difficult trading conditions, particularly in the UK market.

As a result, it expects earnings to fall short of expectations. Analysts are currently forecasting operating profits in the €4.4 million to €5.6 million range.

Shares in IWP gave up 9 per cent on the news to close at €0.20.

The decision to move head office to Skelmersdale, which is expected to result in a significant reduction in IWP's cost base, will be completed this year.

The company will remain Irish-listed and Irish-registered with the move understood to be entirely for cost-related reasons.

Its current head office in Dublin's Fitzwilliam Square is leased and so will not realise any cash for the company.

IWP said its net debt position at the end of March is expected to be broadly in line with market expectations, which range from €79.3 million to €82.4 million.