Profits rise to €1.38m at Magee after cost cutting

The restructuring of the Magee clothing group is beginning to bear fruit, according to the group's executive chairman, Lynn Temple. The clothing operation made a pretax profit of €1.38 million in 2005, compared to a loss of €177,935 the previous year, the latest accounts for Magee Clothing Holdings Ltd and subsidiaries show.

However, the profit was due to an exceptional item which resulted in a gain of €1.95 million. Operating losses for the year were €517,047, compared to operating losses of €150,482 in 2004.

The exceptional item related to profit on the sale of investment land, sold to a group company, Magee Properties Ltd.

In February this year, the group announced the closure of its clothing manufacturing plant in Co Donegal by the middle of 2007 and production being relocated overseas. The closure resulted in approximately 70 redundancies. At the time, Mr Temple noted that all other clothing producers had already moved their manufacturing operations away from Ireland and the UK, mainly because of costs.

Mr Temple said the firm's restructuring process was now bearing fruit and he was confident about the group's prospects.

"The big closure was in 2001 and in February we regrettably had to close in Donegal," said Mr Temple. "The cost base just became impossible and we were forced into moving."

Mr Temple said that, before the move, Magee's products were overpriced compared to competitors. "Sales in Ireland and Britain and Europe are encouraging, because we are more competitive," he said.

Mr Temple said Magee was beginning to trade out of its difficulties and he feels that, by next year, the group will be through its difficulties. "A few years ago, our backs were against the wall, but now we are quietly confident."

A separate company, Magee Weaving Ltd, still produces cloth in Co Donegal, some of which is used in the overseas production of Magee products, and the rest is sold to top designer houses around the world. "It's very much a niche market," said Mr Temple.

The latest results for Magee Weaving show it made a pretax profit of €530,156 in 2005, up from €236,741 the previous year. The profit was transferred to reserves and accumulated profits were €2.37 million at year's end.

The weaving company employed 62 people in 2005, at a cost of €1.88 million.

The Temple family has owned the Magee clothing and tweed weaving business since 1900, when Mr Temple's grandfather, Robert Temple, bought it from his cousin, John Magee.

In its heyday, the group employed more than 450 people in Ireland. The group, including the clothing and the weaving operations, now employs about 100 people.