Chapelthorpe bucks trend but warns of slowing demand

A DOWNTURN in US sales has been offset by “solid demand” in Chapelthorpe’s European operations.

The Wakefield-based manufacturer, which specialises in fibres and coatings, said the trading performance for the first three months of its financial year has broadly been in line with expectations.

As a result of a drop in demand in the US both costs and headcount have been reduced by more than 9% in the firm’s North American operation.

However, despite a rapid rise in raw material prices Chapelthorpe’s European fibres business has continued to perform well.

Even so, the firm said that there were some initial signs that consumer demand for wallcoverings in the UK was beginning to cool.

Announcing its preliminary results for the year ended March 2008 the group said turnover increased to £111.2m from £108.4m the previous year.

The group reported a pre-tax loss of £388,000 from £16.98m the previous year.

Chapelthorpe also confirmed its move down from the Stock Exchange’s main market to Aim.

With a capitalisation of less than £10m, the company is seen as better suited to the junior market.

“As indicated in our preliminary statement, given the uncertainties over raw material prices and the general economic slow-down, we remain cautious in our view for the full year,” it said.

“We anticipate that trading performance will weaken over the coming months, but we continue to take actions to ensure we can optimise performance in increasingly difficult trading conditions.”