Exceptional charges and a high interest bill contributed to an interim pre-tax deficit of €4.7 million at household goods and cosmetics group IWP.

The group yesterday reported that sales in the six months to the end of September were down 10 per cent to €90.6 million from €99.6 million during the same period in 2003.

However, the group sold a number of businesses in the intervening period, and after their contribution is stripped out, turnover shows an increase of 3 per cent from €87.8 million.

The move cut net debt to €89.5 million from €107 million last year. However, working capital requirements drove up its liabilities by €12.4 million in the six months since the end of its financial year last March, when it owed €77.1 million.

IWP reported operating profits of €2.1 million for the period, only slightly down on the comparable six months last year. However, it was hit with a once-off €3.4 million bill for legal and other advice on revised funding arrangements put in place during the last year.

It had a net interest bill of €2 million, and its share of Jeyes Holdings interest charges was €2.3 million. IWP has a 35 per cent stake in Jeyes Holdings.

High kerosene prices during the period hit earnings at Jeyes, and IWP's share of its pre-tax losses was €1.15 million.

Overall, the group lost €4.7 million before tax in the six months to the end of September, a near 13 per cent increase on last year's deficit of €4.2 million.

The group improved its basic loss per share slightly to 6.56 cents from 6.63 cents last year.

IWP's balance sheet showed net liabilities of €1.3 million, compared with net assets last year of €7.3 million.

Chief executive Mr Jim Murphy said the business was operating in increasingly difficult markets. "We believe that we are taking the appropriate actions to respond to these conditions, which will enable us to deliver an encouraging result for the full year."