THE COMPANY behind the Optical Express high street chain has returned to profit as a result of cost-cutting measures and an improvement in gross profit margin.
Lorena Investments is named as the parent company of DCB (Optical Holdings), which has made a string of losses going back to 2011, the year before its founder David Moulsdale put part of the group into administration and closed about one-quarter of its stores.
In the year to December 31, Lorena Investments made a pre-tax profit of £373,000 on revenue of £105 million.
The top line revenue is down £8.6m on 2015, as a result of the previous year being a 13 month period. With 2015 adjusted to a
12-month period, revenue is up £1.8m.
Writing in accounts newly filed at Companies House, director Graeme Murdoch said the company’s strategy was to grow market share, revenue and profitability.
David Moulsdale established the first Optical Express shop in Edinburgh in 1991. The business expanded rapidly, through a series of acquisitions, but has contracted since 2012. It is now heavily focused on laser, lens and cataract eye surgery.
Its UK business generated £95.65m with operations in Ireland, Croatia, and Germany bringing in £9.34m.
“As the UK/Ireland market leader, Optical Express continues to perform the majority of refractive surgery procedures through its extensive clinic network,” said Mr Murdoch. “The business is therefore well-placed to capitalise as consumer confidence in refractive surgery returns.”
The business has gone through a number of restructurings in recent years. And in 2013, Mr Moulsdale was reported to have bought the company’s debt from Royal Bank of Scotland for an undisclosed sum.
The accounts reveal that Mr Mousdale is owed £8.4m by the company, down from £8.5m last year. The loans are being charged at Bank of England base rate plus an undisclosed margin.
In the most recent major change to the company’s structure, Lorena Investments was incorporated in November 2014 and in October 2015 six directors from DCM (Optical Holdings) resigned, including former First Minister Lord McConnell, who was a non-executive director. In the same month, the other five directors, who included Frank Blin, who ran PricewaterhouseCoopers in Scotland for a number of years, joined the board of Lorena Investments.
In 2015, Lorena, which lists 12 subsidiaries in its accounts, reported revenue of £113.6m, which was restated to £103.2m for a 12 month year. DCM (Optical Holdings) reported revenue of £100.4m that year.
Lorena’s net debt at December 31 was £9.5m, down from £11.5m the previous year.
The number of people employed by Lorena Investments and its subsidiaries was 1,048, a reduction of 125 on the previous year. Payroll costs totalled £32m, a reduction of £5m, while directors’ emoluments for the year fell to £888,000 from £977,000. The highest paid director received £501,000.
The accounts note that the Optical Express group of companies continues to be in dispute with HM Revenues & Customs over historic value added tax (VAT) charges.
Earlier this year, six appeals made by the group to the first-tier tribunal were dismissed and the group has requested permission to appeal this decision to the upper tribunal. Lorena noted the VAT in dispute had been paid in full.
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