Dragons' Den badboy's biz Expansys is soaked in red
Profits burned in Euro meltdown as re-org kicks in
The recovery at Expansys - the consumer electronics etailer owned by Dragons' Den meanie Peter Jones - has proved shortlived.
The wireless tech web seller and provider of mobile networks edged back into the black in fiscal 2012 ended April in spite of currency headwinds and hard up UK consumers.
Sadly for Jones and other investors Expansys has slipped back into the red at the half-way point to 31 October fiscal 2013, posting a loss before tax of £2.1m compared to £800,000 profit in the same period a year ago.
This loss includes one off charges of £2.3m related "substantial restructuring" of the Euro division and a provision made for clawback claims from an unnamed UK mobile operator.
Sales for the six months fell by £1m to £45.6m as the trading climate was "more challenging than expected," said Bob Wigley, chairman at Expansys.
He claimed this was "chiefly as a result of worsening performance in Europe as we restructure the business to an appropriate scale in line with the market opportunity and difficult economic climate".
The "headwinds in the retail business" look set to continue, he added, and cost hacking is designed to improve the bottom line in the short to medium term.
The Expansys.com web shop brought in £34.7m in revenues, up from £34.5m a year earlier, while sales at the group's SIM car distie DSNS UK were "in line with expectations".
E-commerce platform provider PJ Media picked up a couple of new contracts with mobile network operators - one in the UK to provide a top up service and one in Asia to build and support a webstore.
Expansys will also incur further re-org charges of £0.9m when it files full-year numbers - last month it outsourced the European warehouse and distie facility, and the multilingual customers services function.
This change is forecast to save the firm £1m a year in the medium term.
The firm noted that profit for the current year "will be lower than current market estimates" but a "new sales structure and evolved distribution" will give it a stronger operating model, it claimed. ®
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