Tough going for Designer

By DITA DE BONI

Weak consumer demand across Australasia will continue to affect results for South Auckland's Designer Textiles.

Managing director Kerry Harding said yesterday that sales in Designer's second half-year June results would be $30 million, down 10 per cent on first-half results of $32.8 million.

Tax-paid profit would be slightly up on the first-half's $1.04 million, to $1.3 million.

Designer directors will not pay a second interim dividend, and will continue with just one interim and one final dividend following this year's annual result announcement in August.

Mr Harding said the introduction of GST into Australia would squeeze a difficult clothing market further.

Retailers had been trying to keep their price points down, passing on the cost of the new tax and forcing clothing producers to continue to look to Asia for supplies.

He said the New Zealand retail market in the first part of winter had been terrible.

Although the company had noticed a pick-up in summer production volumes underway now, it was "too soon to know if the upswing will be sustainable."

But Mr Harding said it had experienced growth in its non-clothing division.

It planned to expand the presence of its Mollers curtain-making division in Australia in the next six months.

The company was also seeing good results from markets outside Australasia, especially the production of Merino products into North America.

It said cash generation remained strong.

In February, the company predicted that measures taken to correct difficult market conditions were not expected to flow thorough the company ledger until next year.

Designer Textile shares last traded on June 9 at 28c.