Abbeycrest looks for Christmas sparkle to build on interims
ABBEYCREST, the Yorkshire jewellery group, said the company had stabilised but warned that the festive trading period would be key in determining the success of its financial year.
Leeds-based Abbeycrest, which both designs and manufactures jewellery, has reported revenues for the six months to August 31 up by 5% on the same period last year to £18.8m, driven largely by the effect of rising gold prices.
However, despite the group’s Brands division showing a marginal improvement in profitability, Abbeycrest’s pre-tax loss before exceptional items for the period widened by £220,000 to £460,000 as operating profits from the Abbeycrest Essentials division reduced by £300,000.
Abbeycrest said the Essentials Division, which serves the mass market and is particularly sensitive to volume and margin pressures, remained affected by “faltering consumer confidence and rising commodity prices”.
Commenting on the interim results, Simon Ashton, executive chairman of Abbeycrest, said: “The outcome for this financial year is, as usual, dependent upon the key Christmas trading period and underlying retail conditions in our existing markets.
“Notwithstanding this, the board believes that the group’s performance has now stabilised sufficiently to ensure that it will benefit incrementally as the effects of the recent restructuring are felt and the strategic shift to design-led product gains traction.”
Mr Ashton added that there was a feeling within the industry that the global jewellery market was recovering and that this recovery was being “led by the less price-sensitive ‘luxury segment’ and the more recession-proof ‘Asia-Pacific region’; areas on which Abbeycrest’s strategy is clearly focussed but where the group has yet to establish a material market presence”.
He added: “Conversely, the mass market consumers in the UK, Europe and US, Abbeycrest’s traditional hunting grounds, continue to be influenced by fears of tax increases, welfare cuts and redundancies.”
Abbeycrest’s operating loss pre-exceptional items for the period was £100,000 compared to a profit of £200,000 over the same period last year. Its pre-tax loss after exceptional items was £500,000.
The group reduced net debt by 14% to £7m.
Abbeycrest announced last week that its senior lender Burdale Financial had agreed to re-set and extend the banking covenants on its £800,000 facility until 2012.
Last month, Abbeycrest reached a deal with its Thai bankers over capital facilities just weeks after revealing it had breached covenants with its senior lender.
The wholly owned subsidiary of the Leeds-based company, Abbeycrest Thailand, agreed an increase of £2.1m to its seasonal working capital facilities with Siam Commercial Bank.
