Ultraframe suffers underlying pre-tax loss of £1.1m and pledges to cut costs in UK by £6m a year.
Ultraframe has blamed challenging UK markets for an underlying pre-tax loss of £1.1m in the 26 weeks ended 1 April 2005.
Sales for the period fell 28% to £44m from £54.9m in the same period last year. The pre-tax loss of £1.1m compared to a £4.7m profit last year.
Exceptional losses of £3.6m, including a £2.9m litigation cost, drove total pre-tax losses down to £6.2m.
Rod Sellers, Ultraframe chairman, said: “Trading in the first half has been in line with our expectations, reflecting the well-documented slowdown in the conservatory market in the UK”.
Sellers said the UK was expected to remain intensely competitive, and predicted that pressure would continue as a result of the wider consumer environment.
In response to the difficult market conditions Ultraframe said it would implement cost reduction plans that could deliver savings of £6m per annum in the UK, with over £5m savings in the current year.
Sellers said: "[The cost reduction] leads us to expect a return to profitability before tax, goodwill and exceptional items in the second half, and consequently the Board’s exceptions for the full year remain unchanged."
“Looking further ahead, we intend to reinvest the majority of cost savings initiated this year into sales and marketing activities to defend and build our market share.”
In the US Ultraframe said its sales were up 2% on last year’s first half results due to actions already taken to reduce costs.
