Laura Ashley sales rise as profit shrinks

Womenswear and furniture retailer Laura Ashley posted a sharp drop in half year pre-tax profit, halved its dividend and said the outlook for retail remains uncertain.However the retail chain, known for floral patterns, said total group sales rose 6.3% to £127.8m for the six months to 1 August 2009. Pre-tax profit fell to £1.1m compared to £4.7m a year earlier. The 2009 figure included a £1m gain from the sale of a store and foreign exchange losses of £5.5m.UK retail sales increased by 6.1% to £101.5m or by 6.7% on a like for like basis. Underlying gross margins remained broadly flat.Commenting on the results, Chairman K P Khoo, said, "I am encouraged by the positive start we have seen to the second half and remain cautiously optimistic that this momentum will continue through to the end of the year." He added, "The general economic outlook remains uncertain but we are confident in our brand, our strong and innovative product offering and our ongoing focus on maximising efficiencies in our business."International operations at Laura Ashley continued to grow while its online sales increased 36% on year. An interim dividend of 0.25p per share has been approved compared to a 0.5p payment last year.