No bid for MBL

31st Jan 2011 11:13

Home entertainment products distributor MBL is no longer in bid talks and that news has knocked more than one-fifth off of its share price. Trading conditions continue to deteriorate and MBL was hit by volume and margin pressure in the run up to Christmas. AIM-quoted MBL has already downgraded profit expectations but it will not be able to meet that downgraded target. The original profit warning was in October - two days after MBL said that it was undertaking a strategic review that could lead to an offer for the company. MBL has also revealed that it will have to enter into a competitive tender in order to retain its home entertainment products logistics business with Morrisons after the contract expires in September. The outcome of the tender should be known in March. Morrisons says that it will take on responsibility for the stock held by MBL on its behalf for the remaining period of the contract. That is good news for MBL's cash flow because it should free up working capital.MBL has managed to trade within its banking facilities. Steven Walsh-Hill is becoming finance director and the current incumbent Lisa Clarke will become chief operating officer. The strategic review process is continuing.