BENSONS Crisps is ''feeling in a most vulnerable position'', chairman

and chief executive Malcolm Jones said yesterday. That was after interim

results which had been hard hit by the costs of closing three sites as

part of its strategy of concentrating the bulk of its manufacturing at

Kirkham in Lancashire.

A charge of #845,000 increased interim pre-tax losses from #386,000 to

#1.69m with an additional negative factor being a #271,000 rise in

interest charges to #401,000.

City reaction was unkind. The shares tumbled 14p to 44p with sentiment

also hurt by the passing of the interim dividend.

The #10m investment, which will take about #1.5m of annual costs out

of the business, is seen as being more surefooted than a substantial

marketing programme for a company which managed to increase its market

share by 1% to 7% last year in the highly competitive crisps sector.

Some 45% is sold to the supermarkets where margins are virtually

non-existent leaving profits to come from the small retail sector.

Overall turnover rose 7% to #17.7m of which about 30% is attributable

to the snacks side such as Tortilla Chips.

Bensons has sold its 45-strong van fleet for #743,000. That lost about

#665,000 in the last full financial year. The cash inflow will help

reduce group borrowings so that year-end gearing should be little above

50%.

While the second half is always the more profitable period, the

current three months are the most important, it seems that there will be

a full-year loss of about #500,000 compared with the 1993 profit of

#302,000.

However, Bensons would have to be in dire straits if a final dividend

of about 1p is not paid.

This looks a rather interesting recovery situation, particularly as

Unichip of Milan paid about 135p for its 4.8% stake.