Interesting article picked up on another BB. Cannot confirm accuracy of content and certainly not yet reflected in the share price (which is down further today)! Could be an interesting development though on a medium term view.
MV Sports to finalise deal to fund acquisitions
16 August 2001 8:00:00 AM
MV Sports [MVS], the most actively traded stock on Aim, is in discussions to acquire two companies by the end of this year.
MV, which makes and sells children's outdoor toys, including Bob the Builder and Barbie merchandise, has £1.4m in cash but is on the verge of finalizing a three-year banking deal giving it access to another £6m. The company will use this money to buy more companies, including a stationery business, and develop new children's products.
MV will also reduce the number of its shares ' management believe this is one of the main reasons for their low price ' through a share consolidation.
There are 1.98 billion shares in the market, but the company has a market value of just £12m.
Financial results out this autumn are expected to show flat turnover, with sales forecasts to reach £27.7m for the year to June. This compares with £27.6m for the previous 18 months.
The company is also set to move into pre-tax profit, compared with a loss of £5.7m a year ago.
'We have had to undertake a lot of restructuring and reduce our spending levels substantially. We now have £1.4m cash compared with just £184,000 last year while the amount of stock is down 50%,' said Kevin Downes, MV's finance director.
Next month MV will unveil its new range of Harry Potter merchandise to coincide with the November release of the film. But Downes believes the next big hit in the children's market could be a set of characters called the Hoobs, who are said to be a mixture of Sesame Street and Tweenies.
The company is still pursuing a claim against power supplier GPU after a power cut last year cost it more than £2m.
MV's share price doubled last year after an article by the infamous City Slickers in the Mirror newspaper that they could reach 15p. However the newspaper article turned out to be widely optimistic and the price has slipped since then to 0.5p. Credibility has been questioned in the past because of accounting problems, but with a new range of products things are expected to pick up. It's early days yet, though, so this must be counted a speculative buy.