Restructuring changes at Design In Action parent Lopex Communications – which forced DIA to axe 36 staff – have paid off. The group paints a healthy trading picture in its year-end results.
Lopex spent some Ãº700 000 on redundancies, and this contributes to a pre-tax loss of Ãº890 000 to year-end 1994. Group chairman Lord Marsh puts this down to new accounting requirements to take goodwill losses through the profit and loss accounts. Profit before tax and exceptional items is up 35 per cent at Ãº1.12m against Ãº829 000 for the same period last year.
“Goodwill losses in 1994, previously written off against balance sheet reserves, accounted for Ãº1.7m of the Ãº2m exceptional items,” says Marsh. “It must be emphasised that the goodwill losses have no effect on the group’s cash flow or net assets.”
DIA managing director Barry Salter says last year was one of “hard medicine”. He says: “Though generally speaking it was a bad year, we did make some serious profit. But a lot of that has been absorbed in redundancy costs and the high costs of reorganisation. We had to reduce overheads.”
Salter adds that the changes have paid off. “This was the right thing to do and we are reaping the results. We are over budget for the first quarter of 1995.” Lopex reported a turnover of Ãº145m compared with Ãº142.4m to year-end 1993; the group maintains its share dividend at 0.25p per share.