Jobs are safe despite annual losses say BNS
Oct 30 2007 by Andrew Mernin, The Journal
TELECOMS services firm BNS has assured staff their jobs are safe despite predicting heavy annual losses and closing its network services division.
The AIM-listed company, which employs 160 people at its headquarters in Prudhoe, Northumberland, issued a trading statement yesterday predicting annual pre-tax losses of £3.7m and confirming the closure of its loss-making network services department.
However, the company plans to create 30 new North-East jobs in its sales and engineering departments this year and expects to make a £2.3m profit by the end of the next financial year.
A spokesperson for BNS said the firm’s North-East operation was performing well and that it was actively recruiting at its headquarters on Prudhoe’s Princess Way.
The group had planned to publish its preliminary annual results today but postponed the report until mid-November after the decision was taken to close its network services division.
The division was on target to record revenues of £8.7m this year compared to £5.43m in 2006, however it was expected to incur operating losses of £6m this year compared to a profit of £600,000 last year. The company said it had “taken the best bits” such as its technology infrastructure out of the division which focused on telephone cards, before closing it at the cost of 15 jobs in London.
A company statement said: “Strenuous efforts were made to dispose of the network services division over recent months and whilst there was interest from a number of potential acquirers, the board concluded that the best option was the rapid closure of the division.”
Chief executive Garry Moat said the group would make a return to the black next year, although it had no planned acquisitions.
He said: “The good news is that through the technology that we created from the network services division we are employing people and looking to increase the size of our sales department.” The company, which raised £2.73m in 2005 by floating on AIM, has seen its share price dip slightly from 32.20p to 29.50 in the last week.
Vinay Bedi, divisional director at Wise Speke, said: “BNS is still trying to find its feet at the moment and it has had a tough time since it came to the market. Its reselling operation seems to be going well so we have to give the benefit of the doubt to the management.
“The problem in those situations is that the stock market doesn’t give companies the benefit of the doubt.”
The group’s business reseller division has seen its sales increase from £20.37m last year to around £26m this year. The division is expected to continue to flourish as 3g Comms – the Midlands mobile phone specialist it acquired in April – helps further boost profits going forward. Last November BNS sold its Northumberland headquarters in a £4.8m sale and leaseback deal to pay back some of its debt. Last year the group posted pre-tax profits of £654,000 for the 12 months to July 31, down from £1.23m in 2005 – a 47% drop. It has spent £1.2m buying four VoIP (voice over internet protocol – making phone calls over the net) specialist companies, since it floated.
