Bang & Olufsen racks up another loss

Luxury electronics brand Bang & Olufsen (B&O) has racked up another loss as it struggles against weak consumer spending across much of Europe.

However, the Danish manufacturer, whose audio products and televisions range into the tens of thousands of pounds, said that its operating margin would rise from a loss to the break-even level in the year ahead as it ditches a number of older lines.

For the full year, the company posted a pre-tax loss of DKr160 million (£18.3m), its third full-year loss in the past five years.

The firm swung to a pre-tax loss of DKr45m in the fourth quarter from a DKr77m profit in the closing months of its previous financial year. Analysts had forecast a DKr43m loss following two profit warnings earlier in the year.

B&O said: “Continued challenging market conditions in Europe are likely to have a negative impact on consumer confidence and continue to create headwind for the overall audio-visual market in the 2013-14 financial year.”

Consumer spending has been weak in many key European markets, although the UK – where B&O’s equipment is sold through a string of dedicated dealers – has proven to be more resilient.

For the current financial year, the firm expects revenue “moderately above the level of the 2012-13 financial year”. Revenue for 2012-13 amounted to DKr2.81 billion, just within B&O’s guidance range given in March.

It has kept its long-term ambition of reaching revenue of DKr8bn to DKr10bn, a goal that some analysts question.