THE video store chain, Xtra vision, continues to record strong profit growth and has now moved into a net cash position.

Pre tax profits climbed from £1.46 million to £2.78 million in the year to January 31st, 1996. But, more significantly, net bank debt of £3.5 million has been turned into a positive balance of £200,000. The company notes that the attainment of an effective debt free status represents an achievement which has eluded it since its formation in 1982.

The company has returned to dividend payments. A final dividend of 11.6p net per share is being paid on the ordinary shares and 0.2323p is being paid on the "B" ordinary shares compared with nil in 1995.

Xtra vision was restructured in 1994 after it went into examinership with debts of more than £10 million. It was acquired by British venture capital funds, Montague Private Equity and 3i which invested £4 million in the company. The groups made their investment by way of subordinated loan stock, £1.3 million of which is still outstanding. This loan stock amounted to £2.8 million a year earlier.

Xtra vision disposed of its beneficial interest in its subsidiary, Network Video Leasing, which was engaged in the leasing of video cassettes to other retail outlets. In a positive move it opened 13 new stores and now operates 141 stores in the Republic.

Xtra vision said it intended to maintain its market position by means of selective expansion through new store openings and a relocation of existing stores. There would also be an expansion of the range of products carried in its stores.

The company, as part of its rationalisation programme sold its remaining 15 freehold prop ties under a series of sale and leaseback arrangement.

The sales also generated £1.85 million in cash flow and improved its balance sheet appreciably. It said it did not intend to hold any freehold properties in future. So further expansion is likely to involve leasehold properties.

Turnover of the group's continuing operations increased from £16.6 million to £17.99 million. Interest payable fell from £500,000 to £400,000. The maiden (since the restructuring) dividend cost £480,000. It is covered a comfortable 6.2 times by available earnings.

Xtra vision said it retained a close operating relationship with its sister company, Maxim Video, which operates 79 stores under vision name in Northern Ireland.