CLOTHING supplier William Baird said it was in a great position to bounce back from "a taxing year", as it reported a slip in pre-tax profits.

Baird, which employs about 200 staff at a site in Skelton, East Cleveland, saw its claim for substantial damages as a result of losing its supply agreement with Marks & Spencer thrown out by the Court of Appeal in February, and also saw an offer for the company withdrawn amid concerns about its debt level.

Chairman Sir David Cooksey said last year had been one of mixed fortunes for the supplier, but said he was keen to tighten Baird's focus and build on the success of its womenswear retail business - the Winsmoor Group.

He said the performance of womenswear and rainwear "stood out like a beacon", with operating profit across the Winsmoor division rising £2.5m to £14.6m.

The new year had begun well with group indebtedness down from £19.2m at year end to £5m.

He said: "We believe we are in a strong position financially and managerially to rebuild the group on its current solid foundations."

Pre-tax profit before exceptional costs fell to £12.8m in the year to December 31, compared with £13.2m the year before.

Turnover from continuing businesses fell to £327.5m, from £333.9m.

Sir David said the sales fall was primarily down to the £19m disposal of Baird's Menswear brands, including BMB Menswear, in Hartlepool, and the decision to exit four rainwear brands.

Other disposals were likely, he said, as Baird concentrated on womenswear and sportswear.

After losing its contract to supply the high-street retailer, Baird closed 16 factories and laid-off 4,500 employees.

Sir David said continuing problems in selling off three factories in Sri Lanka meant the provision for closing the business supplying M&S taken in 1999 would now be £9.8m higher, at £113.3m.

It is thought the increased provision led to venture capitalist group Alchemy deciding to withdraw its backing for a £87.9m management buy-out in January. Exceptional costs this year totalled £31.8m, relating to the M&S fallout and the disposal of Menswear.

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