Chairman John Schaffer said that continued difficult trading conditions at the Howe automotive leather business were responsible for the decrease. “Howe was affected by lower US demand and the loss of the BMW programme. The business was also impacted by the overcapacity in the industry and cost cutting by original equipment manufacturers.” He added, “Howe has repositioned itself and secured its competitive position by moving its cutting operations to low-labour-cost facilities closer to key markets in Europe and Asia. The Gosh (furniture leather) business has been operating in a fiercely competitive market and has been struggling to provide an acceptable return. Over the last three years, the business has been scaled back. With the virtual elimination of Australia’s furniture business (due to competition from finished imported furniture), Gosh will cease all operations later this quarter.”

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