Write-back helps Lopex cut loss

LOPEX, the troubled advertising agency group, yesterday reported a reduced loss before tax of pounds 125,000 for the year to 30 June, against a pounds 948,000 deficit in the previous year, writes Neil Thapar.

The result was helped by the write-back of a pounds 485,000 provision made previously against surplus property that has since been sold. The write-back helped the company to offset a pounds 447,000 redundancy charge, and in consequence it benefited from an exceptional credit of pounds 38,000 in the first half against a pounds 410,000 charge in the previous year.

Thanks to disposals interest costs fell from pounds 948,000 to pounds 465,000, but were still significantly higher than group operating profit of pounds 340,000.

The company said the continuing recession had led to large cuts in spending by advertisers. Although performance across the group was varied, all areas had experienced lower client spend and strong pressure on margins.

New business included commissions from Apple Computer, BAA, the airports operator, and Burger King.

There was an extraordinary expense of pounds 477,000, partly reflecting a substantial loss on disposals.

However, Lopex's bottom-line loss has been trimmed from pounds 1m to pounds 766,000. The loss per share amounts to 1.22p against 4.1p and there is no dividend. The shares were unchanged at 30p.