MBL sale talks off as profits deteriorate

MBL GROUP, the Leyland-based distributor of home entertainment products, said it is no longer in takeover talks as it warned profits will be even worse than expected.

In October MBL, chaired by JD Sports Fashion chief executive Peter Cowgill, said it had appointed advisors to complete a strategic review which could lead to a sale.

In a trading update the company issued its second profit warning in three months stating that earnings for the year to March are expected to be “substantially behind management’s revised expectations” as trading conditions have continued to deteriorate.

The company said it had experienced volume and margin pressure during its busiest period in the run up to Christmas. It is continuing to invest in new opportunities that will allow it to diversify its business and reduce its dependency on one customer, the supermarket chain Morrisons. These contracts are due to expire in September but it is preparing to take part in a new competitive tendering process.

A new finance director, Steven Walsh-Hill, has been appointed to replace Lisa Clarke who will become chief operating officer. In her new role she will handle the day-to-day running of the business while chief executive Trevor Allan looks at new opportunities.

Reporting interim figures last month the company said pre-tax profits fell 78% from £3.2m to £700,000 on sales of £71.1m, down 9%.