Black & Lizars is eyeing expansion

Group business correspondent

Friday 15 March 2013

BLACK & Lizars, the Glasgow-based eye care specialist, has signalled its intention to expand its portfolio to 40 practices in the next two years.

POSITIVE OUTLOOK: Mark Ross, chief executive of Black & Lizars, says the firm is in discussions with other businesses. Picture: Martin Shields

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SCOTT WRIGHT

The ambition was declared by chief executive Mark Ross after costs linked to acquisitions and store refurbishments dented pre-tax profits during its last financial year.

The company, which bills itself the "John Lewis of the optical industry", saw pre-tax profits fall to £465,703 in the year to September 30, 2012, compared with £571,878 the year before.

Turnover dropped to £11.63 million from £11.7m, with the accounts including exceptional costs of £107,697. These relate to the launch of three new practices, in Perth, Dalkeith and Cardonald, Glasgow, last year.Mr Ross said: "This is a particularly strong set of results, given that firstly they cover the period of the double-dip recession when consumer confidence was at its lowest, and secondly the level of positive change the business has gone through."If you look at the profit and loss account, we have borne the impact of a significant, rolling refurbishment programme, plus a number of exceptional costs of new practice launches."If you strip out these one-off costs then we had a strong year during very difficult economic conditions, when other optical chains have been reducing capital investment and actually initiating some pretty substantial closure programmes."Mr Ross said the firm was enjoying the benefits of last year's capital investment in its current financial year, with sales showing "double-digit" percentage growth and profitability looking up so far.This year it has acquired Kilgour Optometrists, which had two practices in Ayr and Troon, taking its portfolio to 26. Deals to add a further three in Edinburgh and the west of Scotland are due to be completed in the next two to three months. Mr Ross said £4m was earmarked to expand its practice network this calendar year, with the funding drawn from an £8m "war chest". That includes £5m in debt finance from Royal Bank of Scotland, in addition to cash generated by the business and backing from owner and long-term investor John Hare.The company aims to double the size of its portfolio to 40 in the next two years, targeting turnover of £25m. It believes there is scope for a business like Black & Lizars to have up to 100 practices around the UK.At present, all of its practices are in Scotland, apart from one in Northern Ireland.Mr Ross: "We have been approached by chains of a similar size to us throughout the UK looking at potential sell-outs. It is all about looking at the right quality and the right locations. "It will take some time to land one of these larger chains, but we're certainly in active discussions with other businesses."On the wider market, Mr Ross said the sector was "polarising" between premium specialists like Black & Lizars, and "high-volume, price-led" players. While emphasising the firm was "not complacent" about its prospects, he said its focus on eye care and the latest optical technology, including 3D eye scanners, should help it resist the tough conditions.

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Black & Lizars is eyeing expansion

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