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Avesco Group

  • BY: Andrew Hore |
  • POSTED: 14/01/2010 |

Avesco Group reported slightly higher losses than anticipated.

Avesco lost £13.2m in the year to September 2009 but had indicated a £12.6m loss in last October’s trading statement. Revenues fell from £94.8m to £90.2m, which was slightly lower than expected. The businesses exposed to the corporate market did worst.

At 20.5p a share, the broadcast and presentation equipment supplier and renter is valued at £5.13m. That compares with a net asset value of £38.5m. Even if intangible assets are excluded the NAV is £34.8m.

Net debt is high at £21.1m with exchange rate losses stopping the figure being lower. Cash generation should reduce this figure over the coming years because there has been a lot of money spent on new equipment. Competitors have been hit by a lack of finance.

Avesco hopes that the World Cup in South Africa and the Winter Olympics will help to boost the utilisation of its equipment. Business has already been contracted.

The cost base is around £5m a year lower and this should help Avesco move back into profit in the year to September 2010. Management hopes that the market is stabilising even if it is not showing any signs of a significant improvement.

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