Bendon targets British market

By DITA DE BONI

Lingerie maker Bendon Group is poised to sign a contract to supply garments to Britain, making it "less vulnerable" to flat Australasian markets.

The company is looking to generate sales in pounds, and reduce its reliance on a small pool of local resellers.

Yesterday, Bendon issued results for the half year to September 30, which showed higher profits, but warned that the last six weeks of trade had "not been up to expectation," with no early turnaround in sight.

"We believe we are reaching optimum levels in both Australia and New Zealand, and so are looking to the UK to continue growing," said managing director Hugo Venter.

The home markets were flat because of weak currencies, and the introduction of GST in Australia had caused price rises of up to 13 per cent.

Bendon posted a $21.9 million net profit for the first six months of this year, largely due to one-off gains from the disposal of its New Zealand China Clays business to French mineral concern Imerys. Shareholders have already received over $16 million in a one-for-four share cancellation from that sale.

Pre-tax earnings from the group's core business, underwear, grew from $1.18 million at half-year in 1999 to $1.63 million this year, which Mr Venter attributed partly to improvements in productivity.

Sales dipped 7.4 per cent in the year, to $40.15 million.

Mr Venter said Bendon was disappointed that growth had slowed after three years of substantial gains, but the group would "not buy turnover."

"We will not mark product down or do give-ways of any sort. We'd rather have good quality turnover.

"We've made a strategic decision not to chase volume, but rather protect the standing of our brands in the marketplace."

Earnings in the full year would be an improvement on last year despite the current slow patch.

"It just may not be of the magnitude we've come to expect - we've been a bit spoiled in the last few years."

Chairman Ian Parton said in August that Bendon was on course to deliver improved pre-tax earnings of about $7.9 million by next March 31.

The company declared an interim dividend of 5c a share for a total cost of $1.543 million, to be paid on December 20. Bendon shares last traded up 4c at $1.85.