Revamp of Bendon yet to hit Ceramco

By Dita De Boni

Ceramco Corporation is set to plunge into the red again when it suffers a $9m hit from one-off restructuring costs in its troubled Bendon lingerie division.

This will set back the company's recovery and blots a positive $1.6m profit for the six months to September 30 announced yesterday.

The minerals and apparel company made a loss in the comparable period last year of $3.5m, a deficit which included one-time costs of $5.5m and improved by year-end to a loss of $1.5m.

The company will take the one-off write down from Bendon in the year ending March 2000.

Bendon - which caused Ceramco's net profit to plummet from $19.3m in 1992/93 to $964,000 in 1996/97, has recovered in the last two years through a move to global outsourcing and strong retail growth in the Australian market.

This has seen the company's Bendon division show a 14.8 per cent revenue improvement on last year to $35.6m.

But the New Zealand division's 8.9 percent increase in the current six months will not secure its manufacturing future in New Zealand.

Bendon's Te Aroha plant closed on November 26 and the Te Rapa plant will follow on March 31, 2000, if a purchaser for the operations there can not be found.

Meanwhile the division's Australian arm grew a further 20.5 per cent,after growing 23.8 per cent last year.

Ceramco's total revenue growth for the six months was 10.3 per cent to $43.4m.

New chairman Dr Ian Parton said Bendon's improved performance was a result of cost containment, quality and style improvements in the product range. Those measures "together with concentration on being a designer and marketer of branded intimate apparel should ensure further growth," he said.

The company's other once-proud performer, China Clays, which saw sales and profits ravaged during the Asian Crisis, has also reversed direction and shown a 14.9 per cent increase in revenue.

However, Ceramco continues to try and offload China Clays and has already divested itself of its other mineral interest Microsilica, incurring a write-down of $1.5m.

During the six month period Ceramco completed a share buy-back programme and repurchased 1,547,180 shares at a cost of $2.279m.

A non-imputed interim dividend of 5c will be paid to shareholders on December 23.

Ceramco shares closed up 4 to 179c yesterday.