Slow progress as MBL exits Morrisons deal

MBL, the Lancashire-based entertainment distributor which fell out with its biggest customer, supermarket group Morrisons, said it had axed half its workforce of 400 as talks with the retailer continued.

Leyland-based MBL said it had completed a “downsizing of its operations” and that it would incur exceptional costs for the year to the end of March, which will be released in August.

After the Morrisons blow – which affected nearly 80% of its turnover – MBL put itself up for sale, but said today it is not in bid talks and was no longer in an offer period.

MBL said in a statement: “The negotiations with Morrisons Supermarket in relation to the contractual matters requiring resolution are continuing. 

“Whilst significant progress has been made by MBL in reducing the level of exposure to Morrisons in terms of debtors and allocated stocks, there remains a residual asset ‘lock up’, which is the subject of continuing work in progress and dispute dialogue.”

MBL said it is “disappointed” that no conclusion had been reached and said shareholders would be udated in August.

It added: “The previously announced downsizing of the operations of the group has largely been completed.  Regrettably this has resulted in a significant number of job losses with an overall reduction of approximately 50% of the employee base.”

MBL said it was continuing talks to exit its investment in Yorkshire-based online jobs and careers business U-Explore and its obligations in relation to the proposed lease of the new distribution centre in Lancashire.

MBL paid £2m for a 15% stake in Sheffield-based U-Explore a year ago as it looked at ways of diversifying its operations.