Hilton profit estimate 'materially inaccurate'
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DESPITE the estimate of a small profit for the first 16 weeks of the current year in its 1973 annual report, unaudited results for the first 28 weeks of trading by Ralph Hilton Transport Services Ltd show a loss of £435,000. This was revealed in an interim report for the halfyear ended February 1974 issued by the company this week. Results for the second half of the year ending July 27 are expected to show a further loss.
The disappointing results reflect, in part, the effects of the energy crisis, restricted working and the prevailing economic climate, says the report. In addition the company has suffered its own particular malaise resulting from the Department of Trade inquiry. It also points out that criminal proceedings are pending against the company's founder.
The problem it has encountered have proved to be deeper seated and more widespread than could. reasonably have been expected and recruitment of vital additional management has been difficult. A further complication was the sudden and unexpected departure of the chief executive, Mr James McNaughton, for health reasons.
Mr McNaughton was primarily and directly responsible for the preparation of management estimates (for the 1972/ 3 report) which were based on incomplete information. This constituted the only available information, however, on which a view could be expressed. Confirmation was sought, by the board, from the auditors before the statement was made and though the board was given reasonable assurance it became apparent that the estimates were "materially inaccurate".
The report states that the standard of management information and the accounting systems have been improved considerably in recent months. The group — of which the Industrial and Comme.rcial Finance Corporation Ltd holds 47.2 per cent of the equity — has been divided into self-accounting subsidiary companies.
At an extraordinary general meeting to be held on September 16, consideration will be given to a proposal to change the name of the company (see CM August 16).