Difficult markets in Russia, Eastern Europe and Britain have hit IWP, with the company's pre-tax profits falling almost 11 per cent to £22.8 million (€28.95 million) in the year to last March.

This is before an exceptional charge of £9.4 million (€11.94 million) related to a rationalisation programme and a goodwill write-off, which meant that overall pre-tax profit fell to £11.5 million (€14.60 million) from £25.6 million (€32.51 million) the previous year.

Overall group turnover rose to £374.9 million (€476.02 million), from £262.4 million (€333.18 million) the previous year. However, the rise was mainly due to the acquisition of Jeyes and difficult trading conditions are reflected in a rise of just 5 per cent in turnover of continuing operations to £276 million (€350.45 million).

Pressure on profit margins meant that group operating profits rose only marginally to £30.5 million (€38.73 million) from £29.5 million (€37.46 million) in 1997/98. Without the £2.76 million contributed by Jeyes, which was acquired during the year, operating profits would have fallen.

Chief executive Mr Joe Moran said it had been a difficult year "and a disappointing end to a decade in which the group experienced continuous strong growth".

Sales of its cosmetics products suffered in the British wholesale market and in Russia due to the rouble collapse last August.

"Russia was by far our biggest export market and the exceptional devaluation of the rouble hit our sales to that market, which were £5.5 million behind budget and £4 million below the previous year," he said. Its toiletries products suffered in their Eastern European markets because of weak demand and pricing pressure. In Britain, in particular, there had been sluggish retail demand. However, the Jeyes acquisition had transformed the scale of IWP's household products division, making it "much more a branded operation". The division, boosted by Jeyes, recorded operating profits of £10.4 million, up from £7.5 million the previous year.

Margins also came under pressure in the more profitable personal care market, where operating profits fell to £13.7 million, from £15.9 million the previous year.

The balance of operating profits of £6.4 million - from £6.1 million the previous year - came from its distribution and labels division. Mr Moran said the benefits from the completion of its central distribution centre in Warsaw would come through next year and the Irish distribution business had put in a strong performance. Labels also had a good year. IWP would concentrate this year on restructuring and integration of its new businesses.