Turnover at the retailer, which operates 145 stores under the Arden News, Supernews, Candies, Supercigs and News Shop fascias, was flat at £103.4m. Maintaining sales levels from fewer stores came at the expense of a reduction in gross margin, according to the directors' report posted this week in the company's accounts. However, this reduction was matched by a fall in distribution costs, the directors said. Accounts showed pre-tax profits were up £42,000 to £256,000 and also revealed that sales of national newspapers and magazines had declined for a second successive year.
The retailer's MD, Mike Colley, is currently trying to complete a MBO of the business from owner and chairman Harry Medcalf, but the recession and reluctance of banks to provide finance have hit plans. Last March Medcalf appointed BCMS Corporate to find other bidders.
Medcalf refused to give any details on the progress of the MBO or other potential sales but confirmed negotiations were ongoing. Meanwhile, fellow CTN operator GT News has reported a hike in pre-tax profits as the company benefits from an ongoing store reorganisation programme. Profits rose from £18,271 to £308,095 in the year to 30 June 2010, although sales slipped 8.9% to £27.9m as four stores closed.