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Eurodis Electron - Debt lower than expected

August 2004

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

The positive surprise to results for the year to 31 May was a reduction in borrowings to £31.6m from £63.1m, much lower than most commentators had expected. This is partly explained  by the 25% decline in sales to £225m reflecting the liquidity constraints faced as some suppliers had asked for cash upfront, which Eurodis was not able to achieve and caused product shortages. This all culminated in two fundraisings which kept the group afloat.  Including £30.7m of non recurring exceptionals and restructuring, loss before tax was £50.9m, double the previous year's reported losses of £25.7m. Gross margins also came under pressure, falling to 16% from 16.6%, with the decrease put down to th ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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