Expansys upbeat despite losses
EXPANSYS, the online retailer that last month came under the control of Dragons’ Den star Peter Jones, has spent the year slashing costs as it reacted to a fall in sales.
The Manchester-based business, which specialises in selling handheld devices like phones and GPS units, witnessed a sharp drop in consumer demand during the year to April 30 which hit sales and profits.
Pre-tax losses widened from £1.4m to £3.7m on sales of £47m, down nearly 30%.
The business said it had cut 86 staff during the period saving £162,000 a month in staff and operational costs. It also repaid a £1.5m bank loan, cutting interest charges by £15,000 a month.
Chief executive Roger Butterworth admitted it had been a “very challenging time” for the business but he said the board’s swift reaction had left Expansys well placed to take advantage of better trading conditions.
He said: “The reduction in our sales was exacerbated by manufacturers withholding new product releases – our lifeblood – for better times. New products such as the Nokia N97, HTC Hero and Apple i-Phone 3GS are now beginning to come to market and I am pleased to report that eXpansys has benefited from these.
“Whilst we remain cautious, I am now more hopeful for the future of the business than I have been for some time and I believe the prospects of the group in 2010 are very good indeed.”
Peter Jones took an 81% stake in Expansys last month through his Virtual Phone Shop business in a share placing that raised nearly £2m. Expansys had urged shareholders to approve the plan saying that failure to do so would “severely threaten” the group’s ability to sustain ongoing operations.
It said it could not raise cash from any other source on “commercially acceptable terms” in the current credit climate.
Today, Mr Jones’ chief financial officer Stephen Vincent was named as a new non-executive director at the business which operates 50 websites in 15 languages.
