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Optical Express posts £1.5m loss

DIFFICULT high street trading conditions saw Optical Express fall to a loss of £1.5 million prior to a major restructuring of the group, new accounts filed at Companies House reveal.

HARD TIMES: Optical Express chief David Moulsdale announced the closure of 40 stores in October.
HARD TIMES: Optical Express chief David Moulsdale announced the closure of 40 stores in October.

The chain, controlled by Scottish entrepreneur David Moulsdale and with its headquarters in Cumbernauld, booked the pre-tax loss in accounts for the calendar year 2011, having reported a near £6.9m profit in the previous year.

The accounts for DCM (Optical Holdings) show turnover fell from £204.7m to £188.2m amid difficult high street trading conditions.

UK income dipped from £181.8m to £169.4m, while European sales dropped from £22.8m to £18.7m.

In the accounts, the directors warned "economic conditions and consumer confidence in the countries the group trades in will continue to remain challenging in the short-medium term".

They also said the Optical Express (Southern) subsidiary was providing cause for concern.

In October this year Mr Moulsdale announced the closure of 40 stores and that the Optical Express (Southern) part of the group, renamed 123 Leeds, was being placed into administration then bought by another subsidiary called Optical Express Limited.

The closures were in "small tertiary high street loss-making locations" which would result in around 100 job losses, although the majority of staff would move to larger flagship sites.

The business retains around 130 stores with more than 50 in Scotland. The accounts show the discontinued operations contributed a £5.19m net operating loss while the continuing operations brought in a £5.3m net operating profit.

Stewart Mein, Optical Express's finance director, said the consumer downturn in the past few years had been challenging but the business was now in a good position and planning to expand again.

He said: "Having recently agreed a long-term bank debt facility with our lender, Royal Bank of Scotland, who have been very supportive, we are now in a strong position to build the business going forward.

"The recent restructuring of one of our nine trading entities has enabled us to move forward very positively indeed."

Mr Mein confirmed £1m was being invested in all refractive clinics and there were plans to open 40 new consultation centres across the UK and Ireland.

The accounts show interest and similar charges in 2011 declined from £1.8m to £1.66m, while a £155,000 exception charge was related to the renewal of banking facilities with Royal Bank of Scotland. Net debt was reduced from £39m to £34.3m.

Average staff numbers at December 31, 2011, were 1998, with payroll costs in the accounts relatively flat at £55.2m.

Directors' emoluments declined from £802,109 to £764,132 with the highest-paid director's rewards flat at £500,647.

DCM has former Scottish First Minister Lord McConnell and ex-PwC Scotland chief Frank Blin among its board members. Tax disputes with Her Majesty's Revenue & Customs may be settled in 2013, according to Mr Mein.

Mr Moulsdale, 43, who began working in an opticians after leaving school aged 16, built up one of the largest optical retailers in the UK after opening his first store in Edinburgh in 1991.

Since then the business has expanded into Europe alongside adding new product lines such as laser eye surgery and private dentistry.

However, the decline in consumer spending and confidence has intensified pressures in the sector in recent years, with the rise of supermarket and online optical providers providing further competition.

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