FC back in black as restructuring pays dividends

Fashion retailer French Connection has shrugged off soaring cotton prices and a tough trading backdrop to sharply boost both underlying annual profits and its dividend.

Reaping the rewards of a big restructuring, French Connection posted profits from continuing operations of 8.9 million in the year to end-January.

That reversed an underlying loss of 9m, and shareholders see the total dividend for the year tripled to 1.5p from 0.5p in the previous 12 months, via a recommended 1p final payout.

Pre-tax profits at "core" businesses rose from 700,000 to 7.3m. The restructuring has involved selling the loss-making Nicole Farhi brand and closing the Japanese business and some North American and European stores.

The business is now focused on its UK and European retail and wholesale operations, the Great Plains wholesale-only ladieswear range and Toast, its mail-order fashion and homewares brand.

Stephen Marks, group chairman and chief executive, said he was "delighted with the significantly improved performance".

Same-store sales in the UK and Europe fell 1.4 per cent in the year. Marks said the fashion industry faced pressures from doubled cotton prices and rising wages at Far East suppliers.