LOSSES at entertainment wholesaler MBL Group widened after the Lancashire-based firm began integrating the businesses it bought from Flying Brands, the Jersey-based mail order company being restructured by major shareholder Sir Tom Hunter.
Aim-quoted MBL bought Garden Bird Supplies, Garden Centre Online and the Listen2 audio books businesses for £720,000 in March, a big discount to their £4.9 million book value. The purchases came as part of MBL’s move from wholesale into retail after losing a contract in April 2011 to supply supermarket chain Morrisons with CDs and DVDs, which had accounted for 79 per cent of its business.
MBL – which was founded in 1995 as Air Music & Media Group and joined Aim in 2002 – highlighted the performance of its four Bee.com CD and DVD shops, but warned that its Windsong rare CD exporting business and its Garden Centre Online had experienced “difficult markets” over the summer.
MBL chairman Peter Cowgill, who is also executive chairman at clothing retailer JD Sports, said: “The group has experienced a period of significant change within the reported six months whilst it focused on the integration of newly-acquired businesses and adapting its existing businesses to the ongoing challenges within the home entertainment industry.
“The group has made progress towards completing the wind down of its discontinued operations and is better positioned to focus on its future.”
His comments came as MBL posted a pre-tax loss of £1m on its continuing operations for the six months to 30 September, wider than the £700,000 posted a year earlier.
Losses from subsidiaries closed down in the previous financial year fell to just £36,000 from £6.5m.