MBL cuts losses in another challenging year

MBL, the Lancashire-based group which lost 79% of its revenues when supermarket group Morrisons axed a contract for the supply of CDs and DVDs, has cut financial losses in a tough year.

The Leyland-based group has closed its Music Box Leisure subsidiary and is trying to rebuild itself as a direct-to-consumer business less focused on the home entertainment market.

It now operates Windsong, a business selling rare CDs and DVDs, has four Bee.com stores and a consumer website, and is now selling gardening equipment and bird feeding products  through two new businesses, Garden Bird Supplies and Garden Centre online, which it acquired earlier this year.

Results for the year to the end of March showed group revenue, including discontinued operations, slumping to £28.1m from £195.3m last year.

On a continuing basis turnover fell to £17.7m from £20m and losses before tax on a continuing basis were halved from £4.2m to £2.1m.

Non-executive chairman Peter Cowgill said: “The group experienced an immensely challenging year as it dealt with the consequences of the loss of its major customer in April 2011.

“The board has stabilised the business and is focused on placing the group on the path to a profitable recovery. The transition to direct-to-consumer sales and entering new product markets is underway. “

Mr Cowgill said MBL is now debt free and has, as of this month, cash balances of £2.7m, but continues to experience a lack of available trade credit.

He said the newly acquired businesses had made a “positive start” to live in the group. Windsong had a “robust year” with revenues growing from £9m to £10.3m.

He concluded: “The transition to direct to consumer sales and entering new product markets is underway. The performance of the home entertainment market continues be reviewed by the board and over the course of the current financial year the wholesale and retail divisions will be used to sell through the remaining Music Box Leisure stock balances.”