Bumper second half from Swallowfield

In the short term, growing exports is key to getting sales moving again. In fact, revenues were only maintained last year because a 12 per cent rise in overseas sales - which now account for over a fifth of turnover - offset a 2 per cent fall in domestic turnover. Sales offices in France and the US won new business and South Africa appears to be a genuine growth market.

Current year guidance is for a similar trading pattern, but more emphasised. So an even weaker current half year will be followed by an even stronger second six months. Lower raw material prices will help contain costs, while margins will benefit from the introduction of higher tech products such as powders to "volumize the hair". It's worth noting that as a small supplier serving much bigger customers, Swallowfield is at the mercy of those clients consolidating, rationalising and reviewing their supply chains and some are even asking it to transfer manufacturing in China back to the UK.

Reflecting the tough macro backdrop, Singer Capital Markets has reined back estimates by around 6 per cent and forecasts current year EPS of 12.2p (from 11.2p in 2011).