- Shares in home entertainment products distributor MBL Group plc plunged by more than a quarter after it warned that its profit for the year to March 31 is expected to be substantially below revised management expectations.

The group said trading conditions had continued to deteriorate since the December 9 interims. The company had experienced both volume and margin pressure during its busiest period in the run-up to Christmas.

Following talks with supermarket group Morrison's on contracts due to expire at the start of September, MBL had been invited to enter competitive tendering for the provision of home entertainment product logistics services.

The company said the outcome of this process should be known by the end of March, when it will provide a further trading update.

Morrisons had confirmed it will assume responsibility for the stock held by MBL on its behalf during the remainder of the existing contracts, representing a significant proportion of the stock held by the company.

MBL said it had continued to develop diversified income streams but this had led to accelerated cash absorption and higher expenses in the formative period.

The company had traded through the period within its existing bank facility and with the transfer of stock to Morrisons expected to generate additional cash balances.

MBL announced the appointment of Steven Walsh-Hill as finance director. He replaces Lisa Clarke, who will now assume the role of chief operating officer.

The company said Clarke will assume responsibility for day-to-day executive operations, allowing CEO Trevor Allan to focus on strategic direction and the identification of business opportunities.

MBL confirmed that while the strategic review process announced on October 5 continued, it was not in any discussions that might lead to an offer and was therefore no longer in an offer period.

Shares were down 21.5p at 56.5p at around 9 am.

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