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Hepworth warns of difficult trading: Prospect of further tough conditions pushes shares down despite 30% profit increase

Tom Stevenson
Friday 25 March 1994 00:02 GMT
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HEPWORTH, the building material and boiler group, warned yesterday that trading was likely to remain difficult in all its main markets. Despite a 30 per cent increase in profits the shares closed 35p lower at 418p.

John Carter, chief executive, said: 'We noted last September that trading conditions had proved to be demanding and the trend continued into the second half of 1993. A number of our UK markets showed modest signs of recovery but Continental Europe remained in recession.'

Stripping out a pounds 9.2m exceptional charge in 1992 to cover redundancies, operating profits fell from pounds 72.2m to pounds 71.6m. The rise in pre-tax profits stemmed from a reduction in the interest charge and lower financing costs on capital bonds that were converted into shares near the end of the year. Earnings per share increased from 15.6p to 19.2p and a final dividend of 9.35p made an unchanged total for 1993 of 14.85p.

Building products, mainly drainage pipes, benefited from the elimination of last year's exceptional restructuring charge, recovering from pounds 14.5m to pounds 20.1m.

Sales and profits from home products were boosted by the first increase in the UK boiler market since 1988 while a third of profits came from Saunier Duval despite poor trading.

The worst performer was refractories, used in the iron, steel, glass and cement industries, and minerals and chemicals, which suffered from weak demand from European car manufacturers.

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