THE story of the oscillating commercial fortunes of video rental group Xtra vision could come straight out of a script from one of those blockbuster movies it rents out to the public.
From modest beginnings in 1982 the company rapidly expanded its network of rental outlets. As the popularity of video cassette rental took off, technological advances reduced the price of VCRs, making them more affordable for the average household.
The pace of growth speeded up when the company was brought to the stock market. But the costs of funding over expansion led the group into financial difficulty. Two years ago Xtra vision was restructured, after being forced into examinership with debts of £10 million, and two British venture capital funds picked up the pieces at a cost of £4 million.
Since then tight stock and cost controls, and a more selective growth policy, have achieved what once looked like a mission impossible.
The resurgence of interest in the cinema and the shorter time taken for popular Hollywood films to become available in video cassette format are additional helpful factors for the business.
Annual results from the group this week indicate profits back in fast forward mode. In the year ending January last, pre tax profits surged £1.3 million to £2.8 million on a £1.4 million increase in turnover at £18 million. In addition the group has managed to wipe out bank debt of £3.5 million and is now in a net cash position of £200,000.
With 13 new branches opened during the year, the group now has 141 outlets in the Republic. An associate company, Maxim Video, operates 79 stores under the Xtra vision name in Northern Ireland.
For the future the policy is to continue opening selective new outlets and to expand the range of products on offer. During the year the group's remaining 15 freehold properties were disposed of by sale and leaseback, adding £1.8 million to cash flow and beefing up the balance sheet.
