TROUBLES are mounting at the Silentnight beds and furniture group after the shock announcement that the company had made a £7.1 million loss for the first six months of the year.

The company, which only weeks ago ousted chairman Keith Ackroyd and chief executive Bill Simpson, has admitted that business has become more challenging.

The Clarke family that built up Britain's largest beds company is now firmly in charge after a bitter boardroom battle.

John Clarke, the son of the late founder Tom Clarke, fronted the announcement of the interim results in his role as vice chairman. The company's losses were blamed on problems at the company's furniture division which incorporates the Ducal and Cornwell Parker brands.

Losses increased from £1 million to £4.9 million and the vast majority of 'exceptional' operating costs of £9.2 million were put down to problems in the furniture operations.

The core beds division, which employs around 900 people at Barnoldswick, posted a five per cent spark in turnover to £81.5 million, boosted by a marketing campaign featuring the Silentnight hippo and duck, which led to increased profits of £7.4 million. John Clarke told shareholders that the fight for control of the company would cost shareholders a further £1.1 million in professional fees and payments to the former chairman and chief executive.

He warned: "Trading conditions have become more challenging across most of our businesses and this is expected to have a continuing effect on our second-half results."

Silentnight also lowered its interim dividend payout and shareholders will now receive 2.5p per share, down on last year's 4.10p payment.

The update disappointed investors and shares in the group dropped 12p to 121p, a nine per cent slide.