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Abbeycrest fallen

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    By By Gavin Montgomery

    Date: Thursday 16 May 2002

    LONDON (ShareCast) - Jewellery maker and distributor Abbeycrest today reported falling profits despite soaring sales in what it called "the most challenging year in the company's history".

    Turnover for the year ended February 28 rose to £91.5m from £78.8m in the previous year, but profit before tax and exceptionals fell to £2.4m from £4.5m, in line with a warning in April but well below previous expectations of a £3.8m profit. The group maintained its dividend at 6p.

    Today's results represent the second year of falling profits at the jeweller and will come as a blow to investors after an upbeat trading statement in January, when the group said like-for-like sales rose a massive 15.1% in the four months to December 31 and that the acquisition of Brown & Newirth had helped lift total sales by 20.9% in the period.

    Investore may well want to question management considering the upbeat nature of the trading statement in January, the massive hike in sales and the eventual erduction of profit.

    At the time, Abbeycrest said that its UK retail clients had reported "excellent" Christmas trading and that the buoyant market would keep it on track to meet full-year expectations.

    Chairman Michael Lever today blamed the poor performance on "substantial increases in costs and temporary increases in working capital caused by the introduction of the new SAP based system within G & A Limited (G & A), the main UK distribution business."

    Net debt stood at £20.1m at end February, up from £15.4m at the beginning of the year, and the group's gearing increased to 97% from 54%.

    The shares fell 0.5p to 89.5p, valuing the group at £22.4m.

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