£3m pumped into PJH as housing collapse hurts
The slump in the housing market has slashed profit and sales at Bolton-based kitchens and bathroom distributor PJH Group Ltd.
The Taiwanese-owned company saw pre-tax profit fall by 33.9 per cent to £6.6m in the year to December 2008, while sales fell 8.7 per cent to £155.4m. Directors said they expected 2009 to be challenging.
During the year it underwent a major restructuring which saw it cut 40 of its 790 staff and close down a depot in Leeds.
Accounts also reveal the company entered into proactive talks with its bank HSBC and renegotiated its banking facilities during the year to allow it “flexibility” to adapt to challenging conditions.
The accounts say that as part of these discussions PJH’s owner made a £3m capital contribution which was received in December 2008.
PJH’s holding company Globe Union (UK) Ltd carried long-term debts of £22.4m, down from £28.3m in 2007, which after interest payments of £2.7m left the company with a pre-tax profit of £1.4m for the year.
PJH was bought in 2007 by Taiwan-based bathroom and kitchen products manufacturer Globe Union for a reported £100m from Lloyds TSB Development Capital. It supplies retailers, the trade, specialist shops and builders’ merchants and clients have included B&Q, Barratt Homes and Persimmon.
A directors’ report in PJH’s accounts says: “2008 has been a particularly challenging time for all businesses serving the retail, merchant and construction market. The declining availability of mortgage finance, poor economic conditions and low consumer confidence has given rise to the toughest trading environment for many years.
“Under the circumstances we are pleased at how we have responded. We have strengthened our management team and restructured our group operations, streamlining costs and focused our management team on the strong financial controls, through margin, costs and cash flow, while at the same time reducing our debt.
“We expect trading to continue to be challenging in the medium term. As market leader within the sector the group is well positioned to take advantage of the growth opportunities in 2009.”
The costs of the restructuring were treated as a £400,000 exceptional item in the profit and loss account.