Littlewoods is deeper in red

Mar 5 2008 by Bill Gleeson, Liverpool Daily Post

HOME shopping group Littlewoods Shop Direct has plunged deeper into the red.

The Speke-based company’s latest annual accounts, filed at Companies House this week, reveals a worsening trading position.

Sales fell 12.5% to £1.76bn in the year to April 2007. The figure compares with turnover of just over £2bn in the previous year.

The company made a loss before interest and tax of £24.2m, down from a profit of £12.4m the year before. The retained loss for the year worsened to £50.7m, down from a retained loss of £20.3m in the previous year.

Yesteday group finance director Peter Ahye attributed the deterioraing financial performance to the continuing decline in Littlewoods print catalogue business.

Mr Ahye said: “This is what we have been trying to do for the last three and half years. We have been trying to grapple with the decline in the underlying business, which has been going on for many years.”

He said a similar decline was affecting all catalogue shopping businesses, before insisting that the decline at Littlewoods has been halted during the current trading year. Figures for the current year are expected to be published in summer.

Mr Ahye said: “That’s testament to the fact that what we are offering now is much more appealling.”

The company has previously said it expects 50% of its total sales to come from online orders by the end of 2008. It expects that proportion to rise to 70% by the 2011.

Mr Ahye attributed part of the de- cline in last year’s profits to redund- ancies announced during the period.

He added that the group’s preferred measure for profitability, earnings before interest, tax, depreciation and amortisation (EBITDA) had already shown signs of improvement.

The Barclay family, which owns Littlewoods, injected £282m of fresh capital into the mail order and internet shopping group during the 2006/07 year. Mr Ahye warned further capital injections would be needed in the future.

He said: “We will continue to need further support from the shareholders until EBITDA is sufficient to cover the interest and capital needs of the business. This business has been under-invested in for a long period of time.

“People really under-estimate just how much of a turnaround this is. We are determined to make this a suc- cessful group and we are delighted we have caught the crest of the online wave.”

BILL GLEESON: PAGE 8

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