In his Chairman's statement, Ian Martin commented that the past twelve months represented the third difficult year in succession for the Group and pointed out that within the period covered by the results, Avesco had only been trading as an independent company for a short time. Also, significant additional costs were incurred to achieve the demerger and Avesco's subsequent listing on the AIM (Alternative Investment Market), together with the provisions required for the reorganization, relocation and restructuring of the demerged company. However, he described the results as, at best, only satisfactory.
Group turnover from continuing operations was down to £53.7m with a pre-tax loss of £7.6m compared to a loss of £4.5m in 2003. Despite these losses, the net debt level was reduced to £8.3m (2003: £10.3m). Having restructured the senior operational management of the Group, the focus this year is on improving margins, a return to profit and continued infrastructure development from which to build future growth.
Chief executive, David Nicholson, in his review of operations was also keen to point out that towards the end of the last trading year and in the early days of the current year, positive trends were emerging with improved financial results. Commenting on the senior management restructure, Nicholson said that the relocation of Graham Andrews to the States in the role of chief executive of the Group's North American operations would send a positive message to their US clients and emphasize the importance the Group places on this market. The North American operations of the Group saw a turnaround in performance that produced an operating profit of £1.1m compared to the previous year's loss of £0.8m.
With regard to Europe, it was the UK that proved to be the Group's most challenging market last year with Creative Technology London producing a significant loss. Weak demand and strong competition on prices were seen as the main contributory factors here. However, Nicholson said that, following relocation, new investment and restructuring of the management team, early signs for the coming year are encouraging. In addition, all three of Avesco's mainland European companies recorded an operating profit in what is seen as a growing market for the Group.
(Barry Howse)
