Earnings plunge at MBL
MBL GROUP, the Leyland-based distributor of home entertainment products, saw earnings plunge by nearly 80% in the six months to September.
The business, which issued a profits warning in October, said pre-tax profits fell 78% from £3.2m to £700,000 on sales of £71.1m, down 9%.
It blamed the cost of investing in new opportunities that it expects to generate sales in the next 12 months. MBL is keen to diversify its business and reduce its dependency on one customer, the supermarket chain Morrisons.
It said it has invested in an e-commerce platform and the online capability of its wholesale division. It has also trialled a small number of retail stores and concessions.
Chairman Peter Cowgill, who is also the chief executive at JD Sports Fashion, said: “The group’s strategy has been to diversify its underlying businesses and strengthen future revenue streams to reduce the impact of the dependency on its major customer, Wm Morrisons plc, and to recognise that the growth areas for home entertainment products reside within online and digital sales.
“The group has made significant investments in digital and online capability platforms and also in the underlying business infrastructure. The Group is now in a unique position to offer its business customers capability within the home entertainment sales markets of in-store, online and digital.”
Since September trading has continued to be challenging for the group and management have further revised their expectations for the year.
In October MBL announced it was conducting a strategic review that could lead to a sale of the business. This process is still ongoing.
A final dividend of 7.5p will be paid in January.
