By Sarah Falson
LONDON: Alba PLC, Bush Australia’s parent company, said it has set in motion proposals which may result in the “disposal or demerger” of its leisure division, and has announced “substantial” job losses in its consumer electronics division.
An interim statement of financial results from the investor relations board for the six months ended 30 September 2006 was posted on the Alba website last week, and reveals the proposal could mean considerable value for shareholders.
“The Board of Alba PLC announces that, against a background of continued difficult trading conditions for the Consumer Electronic division, the company has set in motion proposals which it expects will realise considerable value for shareholders, and may culminate in the disposal or demerger of the Leisure Division.
“The outcome of these proposals is uncertain. However, the Board expects to be in a position to update shareholders regarding progress prior to the end of the financial year to 31 March 2007.”
According to the statement, for the six months prior to 30 September 2006, Alba – which is the largest consumer electronics company in the UK and has a portfolio of brands including Bush, Grundig, Breville and Hinari – has experienced pretax losses of ₤11.8 million (A$29.1 million) compared to a loss of ₤6.6 million (A$16.2 million) in the previous period.
Accordingly, a restructuring program is currently underway, which is expected to result in a “substantial headcount reduction” in the consumer electronics division, in order to “restore the division to an acceptable level of profitability.”
Bush Australia Pty Ltd managing director, Daniel Todd, assured Current.com.au that Alba has not yet decided if it will forge ahead with a disposal or a de-merger.
“If, however, a sale was decided upon, Bush Australia will still have the current facilities in place in our HK and China offices. Therefore our relationships with our makers and contacts will not be affected,” he said.
Todd also said that the Consumer Electronics and Leisure divisions are “intrinsically linked by a long term relationship” and that the relationship would “remain unbroken”.
In addition, Todd said: “It should also be made clear that the two divisions are naturally independent by the nature of their products.”
Alba UK’s Leisure portfolio includes Breville, which is distributed independently in Australia, along with JCB, Nicky Clarke Electric, and Carl Lewis Fitness, the latter three of which are “unable to be utilised currently in Australia,” according to Todd.