Vision Media Group becomes latest victim of crunch
British out-of-home operator Vision Media Group (VMG) last week suspended trading in its shares on London’s Alternative Investment Market (AIM) as it prepared to go into administration.
VMG was the second out-of-home firm to disappear from the UK stock market in a matter of days. Ireland’s Adwalker, also AIM-traded, began the process of liquidation in the same week.
Administration involves the appointment of an administrator whose duty is to oversee the company’s affairs in the interest of creditors. In VMG’s case, an administrator could run the company as a going concern while a solution – possibly the sale of the business in part or whole – is sought.
The company, previously known as ScreenFX, had been hampered for some time by tight cashflow and difficulties raising funding.
During the year ending 31 December, it had originally hoped to install more than 200 of its Iconic Pod units in UK malls, but managed only 46 – a shortfall that VMG attributed to cost pressures.
The company, previously known as ScreenFX, had achieved what it called “significant operating cost reductions” during 2008 but nevertheless lost £4.6m ($7.5m) on continuing operations, the same as in the previous year. Revenue was down 12.5 percent year-on-year to £1.4m ($2.3m).
Executive chairman Mike Cottman said late last month: “The global credit crisis and the worsening UK financial conditions made it impossible for our company to raise essential capital in the financial markets and this in turn led to a stagnation of our plans for the continued rollout of our shopping-mall programme.”
However, he also spoke of “green shoots of recovery emerging from the gloom”, thanks to VMG’s deals outsourcing national advertising to Clear Channel Outdoor and local sales to WRT Group.
Since then, the company has also sold its interest in the TrainFX business operating screens on British trains.
However, none of these measures appears to have been sufficient to keep VMG in the black.
www.visionmediagroupplc.com
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