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05 February 2004
The Herald
Optical Express owner turns blind eye to slump in profits

DAVID Moulsdale, owner of the Optical Express chain, has vowed to pursue further acquisitions despite seeing the profits of his eyecare empire virtually wiped out last year.
The 35-year-old Glaswegian blamed the slump in trading performance on the costs of integrating Health Clinic, a 20-store Newcastle chain which was losing 1.5m a month when he bought it out of administ-ration in late 2002. 'We have turned that business around but are not finished maximising its profitability,' he stressed.
Moulsdale, who is worth an estimated 30m, has borrowed heavily from Bank of Scotland to fund a string of acquisitions since the mid-1990s. The purchases have seen the Cumbernauld-based Optical Express chain grow to some 164 UK outlets, all but a handful of which operate under the Optical Express brand.
In its most recent financial year, the pre-tax profits of holding company DCM Optical Holdings slumped to just 171,000, down from 1.8m in 2002 and 3.4m in 2001. The fall came despite a 7% rise in sales from continuing operat-ions, to 48.9m.
Acquisitions added another 15.3m to revenues, taking DCM's total sales for the year to March 29, 2003 to 64.2m.
Moulsdale said like-for-like sales in this financial year are 8% higher, adding that profits will increase in 2004. He also indicated that there will be no let-up in the group's breakneck expansion programme, despite its impact on the bottom line.
Operating profit on continuing operations dipped from 2.3m to 1.3m, which Mousdale blamed on the costs of beefing up the management team and infrastructure to deal with an estimated 35m in extra sales flowing from the 2002 deals. Moulsdale immediately took 9.5m out of the Health Clinic cost base by offloading non-core parts of the business.
He said: 'Our ratio of debt to both turnover and profit is one of the best in the industry. We are not actively seeking a disposal and are looking to grow as best we can. We are looking at new acquisitions and seeking to grow market share and profitability.'
Moulsdale declined to discuss takeover targets, after it was reported last year that he had approached Boots about buying its 200m-a-year opticians business. He also expressed interest in taking over the management of Boots' in-store opticians, but that proposal came to nothing. 'We did not acquire any of the Boots (standalone) stores or operations,' he confirmed.
In addition to Health Clinic, Moulsdale's most significant purchases have included the Co-op Eyecare chain of 34 shops in 2001. In May last year, after the accounting year-end, he paid 2m for Manchester-based Maxivision, which he claimed would give the firm top spot in the UK's laser surgery market.
Moulsdale's vision for the group has been to maximise sales and profits for existing UK outlets before exploring overseas markets.

PAUL ROGERSON February 05 2004

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