Int. Greet profit warning

Giftwrap and birthday card maker International Greetings has warned of falling profit, prompting the restructure of its UK operations.

The company said its UK, Eastern European and Chinese manufacturing facilities cannot deliver 'acceptable' profit margins in their current state.

To mitigate the problem, it will streamline the business and sell certain assets, yet to be decided.

The UK greetings division will switch its business model to being market-led rather than volume driven.

The reduction of UK in-house manufacturing will reduce capital and spending requirements.

International Greetings said poor uptake of Christmas goods in December has dampened trading. It has blamed a slowdown in consumer spending since January for causing financial results to be 'much worse than expected'.

Bad debts have been rising, as have freight costs and manufacturing problems. As such, shareholders will be denied a dividend for the current financial year.

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