Sales for the six months to March rose 22 per cent to

Sales for the six months to March rose 22 per cent to pounds 13.2m, with like- for-like growth of 18 per cent.This compares with around 3 per cent from DFS Furniture, which occupies the more downmarket end of the market. Meanwhile, the Chancellor’s expected attack on tax credits could cut the windfalls NFC has been gleaning from its overfunded pension scheme.Full-year profits of pounds 115m, including another pension credit of around pounds 21m, would put the shares on a forward price-earnings ratio of 13. Yesterday’s disposals look sensible, but further pruning may be needed on the Continent, where losses climbed from pounds 4.5m to pounds 5.3m in the half year. And while profits were up a strong 12 per cent to pounds 39.1m in the UK, the decision to relinquish three large yet unprofitable contracts with Whitbread, Homebase and Boots suggests the market remains tough. It will be ungeared by the year end and Sir Christopher would be comfortable spending up to pounds 200m on expansion in automotive parts, electronics and consumer goods in expanding markets such as North America and Asia, where NFC is achieving growth rates of up to 36 per cent.Management will have to tread extra carefully to avoid the wild spending spree in Europe at the turn of the decade which led to many of the current problems.

Indeed, NFC has lost as many contracts as it has won in the home market of late.The question is what the group will now do with the net cash of pounds 168m it will be left with after the disposals and reorganisation. The pounds 39m cash cost of the plan is expected to be recouped from savings in the first two full years.But there must remain doubts that the Augean stables have been fully cleaned at NFC. But, despite Sir Christopher’s confident assertion that the group is now out of the woods, it is clear there is still plenty of work to be done.Yet another reorganisation programme, accounting for a pounds 49m charge in these figures, will see some 60 properties go in the UK, a management shake-up in Europe and the loss of some 500 to 600 jobs overall. Gerry Murphy, the chief executive brought in by chairman Sir Christopher Bland, has been wrestling for the past two years with what is probably the world’s largest and most restructured transport and removals group. But the shares, up 0.5p at 128.5p, have stubbornly refused to respond, underperforming the rest of the market by 58 per cent since the beginning of 1994. The group warned raw material costs would increase again, led by propylene-based products.. He warned that “clearly [they] will have a negative impact on profit in the current year”.
However, he forecast exchange rate effects would not affect the company’s competitive position and said he was “pleased” with the performance of CPS since January and the progress in realising synergies CPS chipped in pounds 3.9m profits to these figures.

NFC, the old National Freight Corporation, is taking a while to respond to the treatment being meted out by new management. The original operations saw gross margins rise from 36 to 39 per cent on reduced raw material costs, improved manufacturing efficiency and stable sales prices. Announcing a 30 per cent rise in profits to pounds 54.6m for the 12 months to March, David Farrar, chief executive, said the recent significant changes in exchange rates would have hit profits by pounds 5m had they applied throughout the year. The shares slipped 1.5p to 128.5p, but remain above the 118p terms of December’s cash call. Shares in the group, which is one of the world’s largest manufacturers of rewinders for plastics, closed 160p up at 807.5p.Mr Rogers said Atlas waslooking to expand its international business.