Taylors Group posts lower year profit

Cleaning company Taylors Group has announced a 9.3 per cent drop in full year profit, partly due to increased fuel and energy costs.

Taylors reported an after tax profit of $3.6 million , compared to $4 million for the comparative period.

Sales revenue grew 3.5 per cent to $67.9 million.

Shares in Taylors fell 5c or nearly 3 per cent to $1.70 yesterday.

Taylors had previously forecast a result close to last year's and said trading was much improved in the second half, but it had been hit by restructuring costs.

There had been lower demand from hospitality clients, and that had undermined increased sales to the healthcare industry.

During the year, Taylors transferred its Rotorua processing work to Hamilton and sold its Invercargill business because of the cost of ferrying linen between there and Queenstown.

Increased fuel and energy prices were affecting both delivery and laundry costs, and new holiday legislation meant the company would have to pay an extra $500,000 next year for leave.

Looking ahead the company said pressure on health funding would have an impact on Taylor's customer base in that sector, and it would need to invest in better technology to gain operation efficiencies.

However the group was forecasting a modest improvement in net profit in the coming year .

Contract negotiations with the Auckland Regional Health Boards regarding its linen supply contact were ongoing.

- NZPA