In addition to lacklustre demand, the Group’s year to date performance has been affected by other factors including the short term price spike that followed the Chilean earthquake, and the rapid decline and then recovery in the value of the Australian dollar in May.

In a statement to shareholders, the company outlined the margin decline has highlighted the need for the completion of the previously announced warehouse rationalisation strategy. This will take place over the next fourteen months, and together with other planned cost reductions, is expected to yield savings of around $6m per year.

In the four months to October 31, the Group also recorded a small underlying EBITDA profit of $650,000, which was well below the equivalent period last year.

A statement to the ASX outlines, “As indicated in our recent communication, 2010 has been one of the worst years on record for failures among the customer base.

“Notwithstanding this fact, the Group has been able to successfully renew its credit insurance facility providing significant comfort around its receivables.”

The Group also claims that it continues to maintain strong control over working capital, with net debt remaining at a little over $35 million.

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