Lamont Holdings, the Northern Ireland textiles company, has further downgraded expectations for this year, saying losses "would substantially exceed current market forecasts". The market reacted negatively, reducing the share price by 42 per cent to a new year low of 16.5p sterling. This contrasts with 300p in 1996. The market capitalisation yesterday almost halved from an already low of £8.6 million sterling to £5 million sterling. In October it told shareholders to expect a profit decline, then in November it said it would incur losses. Now it warns that "trading this year has been more difficult and for a longer period than had been earlier indicated. This has resulted in a greater first half loss than anticipated and, despite improving prospects, the loss for the year will be substantially more than current market expectations."
This has not been quantified but it could be in the region of £5 million. Mr Dermott Simpson has resigned as a non-executive chairman and as a director of the company. Lamont said the resignation has arisen because "he has a number of other significant business interests which will prevent him from devoting the time required as chairman to meet the challenges which the group faces as it seeks to reposition itself in its various sectors".
Mr Frank Cushnahan has succeeded him as non-executive chairman, and a director. He is chairman of Belfast Harbour Commissioners.
Chief executive Mr Dick Milliken told The Irish Times "we are trying to rebuild our customer base" in textiles, an industry that has been "decimated". Lamont is "repositioning" its businesses.
Lamont said trading has been affected by reduced demand across the various businesses but in particular at Alexander Drew, where a number of major customers had experienced difficult trading. Ordering had stopped, Mr Milliken said.
The earlier warnings focused on difficult trading with "subdued " demand for carpets and home furnishings and the commissioning of new plant and equipment at Moygashel and BFF Nonwovens had continued to cause disruption. These commissioning problems were described as "temporary".
On a more optimistic stance, the company said the "investment in new equipment across the group, together with the more focused marketing approach, has created a number of significant market opportunities which, together with the traditional seasonality of the linen business should result in improved trading in the latter part of the year". Lamont also stressed that in light of a strategic market review, the group is considering the most effective way of making the group more market and customer focused. This may result in a number of structural changes in the future.
Lamont suffered from a decline in pre-tax profit from £7.5 million in 1997 to £1.6 million in 1998.
