Camera retailer Jessops today said it was on a sounder footing after efforts to improve margins helped compensate for a sharp fall in sales.
The firm said revenues in the six months to March 31 fell almost 25% to £134.8 million after it shut 81 stores in the period. Like-for-like sales also dropped 5% in a tough climate, but a sharp improvement in profit margins meant Jessops' operating loss narrowed to £2.9 million from £6.3 million last year. Bottom-line losses were down to £11.2 million from £24.7 million in 2007.
The company, which recorded full-year losses of almost £70 million in its last financial year, has reduced stock levels, cut costs and closed underperforming stores, as well as launched "new and innovative" products.
Executive chairman David Adams: "While the economic and retail environment remains very challenging, the business is on a sounder footing."
He added that agreement had also been reached in principle with HSBC to secure longer-term funding for the business.
The City responded positively to the update, with shares up by 7% today.
That was despite an 8% fall in like-for-like sales in the eight weeks to May 25, with total sales off 24.1%. Margins showed a 4.6 percentage points increase.
Mr Adams added: "We will continue to drive profitable sales as hard as we can in this difficult market."
The Leicester-based company has suffered from heavy internet and supermarket competition but has held its share of the digital camera market and in particular its position in the specialist digital SLR market.
It responded to its difficulties by closing more than a quarter of its 315 stores and axing 550 jobs under a £15 million cost-cutting drive. Jessops now has a network of around 230 stores across the UK.