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Monday, July 13, 1998 Published at 09:35 GMT 10:35 UK


Business: The Company File

Probe sees Allied shares suspended


Dealing in Allied Carpets shares has been suspended after it emerged that some of its shops have not been observing company sales policy.

Allied has been forced to call in auditors Arthur Anderson to sort out the matter which could have affected as much of 3% of its sales.

Based on last year's turnover of 255.7m, that means nearly 8m worth of transactions have been affected.

However, Allied stressed that the errors would not lead to a cash loss.

Managing director Ray Nethercott said: "This is not about fictitious sales or profits but the timing of sales recognition."

He said he hoped to have the audit completed and the share suspension lifted by July 28, when the company was due to publish its 1997/98 results. "We are going to be working very hard to meet that deadline," he said.

Sales slip-up

In a statement to the Stock Exchange, the company explained that its official accounting policy was to record a sale as a sale only when an item had been collected or delivered.

But some stores had been entering sales while the carpet, although fully paid for, was still in the store.

A spokesman added: "The enquiry is in progress to establish the extent of this non-compliance."

Allied said its financial position remains "robust", with net cash of 8.7m at the group's financial year end on June 27.

In January, the group reported pre-tax profits of 9.51m ($15.51m) on turnover of 138.8m for the six months to December 27, 1998.



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