The £350,000 cost of reorganising its UK manufacturing base is likely to hit first-half profits at women's wear manufacturer Slimma Plc its chairman Alan Webb said today.

The company is moving its "traditional manufacturing to one of our quick response units offshore to leave an elite group of specialist machinists and support staff who will concentrate on niche product and customer 'quick response' service needs," Mr Webb said.

He added that the costs associated with the move will result in first half profits being below last year's.

"Benefits will include a reduction in our Contract Division's overheads, coupled with improved product margins in the second half of our financial year. It is not anticipated that these benefits will fully recover the costs by the financial year-end."

Speaking at the company's AGM today, Webb said a slower than usual call off of spring/summer product from high street customers will result in sales moving from the first to the second half of the financial year.

"Although our first quarter sales are well ahead of last year and our spring/summer 2003 order book is at similar levels, we continue to be cautious in light of further economic and political uncertainty which could place downward pressure on consumer spending levels."