Doorstep catalogue retailer Kleeneze announced turnover in its door-to-door sales business has fallen by 2 per cent to £42 million as it posted half year pre-tax losses of £9.2 million.

The Swindon-based group, which sells mops, dusters and other household and personal care products, described the fall in sales at Kleeneze UK in the six months to October 31 as 'disappointing'.

Despite an improved format for its main catalogue, the number of distributors employed by the division who placed regular orders fell 8 per cent to 9,400 against 10,230 at the same time last year.

The group posted an eight per cent increase in operating profits from ongoing operations to £2.8 million as turnover on the same basis rose by two per cent to £75.6 million.

But it racked up exceptional costs and operating losses of £11.8 million during the period, which it said rose primarily from the sale of its display marketing business DMG in July. That led to bottom line losses of £9.2 million against £22 million last time.

Chief executive William Rollason said Kleeneze UK, which boosted operating profits by three per cent to £3.2m had launched programmes to improve recruitment and retention of distributors.

The division plans to introduce more seasonal catalogues in 2004 following the success of a Halloween catalogue, he said.

Mr Rollason added that Kleeneze was continuing to focus on improving performance at its Farepak business, which provides Christmas hampers, gifts and shopping vouchers on a monthly instalment basis through catalogues and made operating losses of £400,000 on first half turnover of £33.6m.

Mr Rollason said the group had 'been restored to a sound basis which was reflected in its decision to resume dividends to shareholders with a 1p interim pay- ment. "Overall, we believe our expectations for the full year will be met," he said.

Kleeneze shares were down 4p at 152p, although broker Seymour Pierce called the results "a good set of numbers" and said the firm was starting to see the benefits of running a leaner operation.