SILENTNIGHT, the UK's biggest bed manufacturer and maker of cabinet furniture, has announced a three per cent increase in sales over the past year, but a slight fall in pre-tax profits.

Nevertheless, its pre-tax profits for the year ended January 30 1999 still stood at a healthy £16.3 million, down just one per cent from £16.5 million the previous year.

Turnover (sales) for the group went up from £229 million in 1998 to £236 million, a rise of three per cent, and shareholders can expect a dividend of 12 pence, up by four per cent.

Once again the Silentnight Group's star performer was its UK Beds Division, including the main Silentnight Beds plant at Moss Shed, Barnoldswick.

The division again produced record sales, profits and returns.

Turnover was ahead by 10 per cent and profit before interest up by 16 per cent.

In its first year as part of the group, the Rest Assured beds business achieved sales of £7.2 million and operating profits just above break even level. Progress at the company is expected to continue during 1999.

Excluding Rest Assured, sales for the division grew by four per cent and operating profits were up by 16 per cent.

The UK Cabinet Division performed less well, reflecting a difficult year caused mainly by poor retail demand.

In September last year the group announced it would cease production of its Meredew brand at its Barnsley site and sell off the property. The move was linked with a decision to integrate all the group's cabinet operations into one business, Silentnight Furniture.

Excluding Meredew, sales for the division fell by 15 per cent and operating profit was down 29 per cent on the previous year to £3.1 million, still representing a reasonable six per cent return on sales.

Trading losses and one-off costs for the closure of the Barnsley site amounted to £2.9 million and are included in the results for the year.

For the group's two American-based businesses, turnover was ahead by 13 per cent, representing substantial growth in market share.

Operating profit was up 47 per cent to £1.9 million and, excluding the previous year's bad debt of £450,000, profitability increased by nine per cent.

Last month Silentnight announced the possible sale of its US beds business. Discussions are continuing and a further announcement is expected soon.

The company is also looking at selling its spring making business, Barnoldswick-based Wellhouse Wire Products, to American company Leggett and Platt, the world's biggest bed spring manufacturer. Negotiations are ongoing and further details are expected in due course.

Finally, the group's German business improved sales by 12 per cent despite continuing poor retail conditions. Profit rose by 84 per cent to £771,000 and the business remains poised to take full advantage of any upturn in retail conditions.

Silentnight Holdings chief executive Bill Simpson said: "Our UK Bed Division brings much stability to our group and is a solid base to our activities. I believe that, as market leader, we will continue to see benefits from this solid base.

"The cabinet business will, increasingly, see the benefits from elimination of surplus manufacturing capacity and from the efficiencies and better focus as a result of the business integration. I expect to see improved performances in both Germany and the USA.

"Our focus and our determination, coupled with the elimination of one-off costs at Meredew, should ensure a further successful year for the group in 1999."

Back in January there was some surprise when up to 50 redundancies were announced at Silentnight Beds in Barnoldswick, less than six months after the company's half-year results showed pre-tax profits up 22 per cent to £7.1 million.

A company spokesman said the redundancies were due to a slight downturn in orders and a subsequent restructuring, adding that the company hoped to achieve them through voluntary means.

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