Photobition has given its strongest indication yet that a management buyout (MBO) will happen, after reporting that trading since January has fallen well below expectations.


"An MBO is just one of the possibilities that we will be considering as we move forward," said finance director Steven Smith.


Chief executive Eddie Marchbanks was linked with an MBO bid three weeks ago and was understood to have made initial approaches to venture capitalists (PrintWeek, 27 April).


Although trading for the group improved in March and April, the effects of its ongoing cost-cutting programme are starting to hit performance.


The programme has involved the closure of three sites, the merger of its graphic production and graphics display divisions, and around 60 staff being made redundant.


The true performance of the group for the financial year to 30 June 2001 will depend on trading in May and June.


Photobitions share price, which has yo-yoed from a high of 444.5p to a low of 34.5p over the past year, fell by 1p to 46.5p following the reports.


Smith said other possible options for the group included refinancing, debt restructuring, or some form of fundraising.
He said Photobition was "exploring all the options available", and was taking advice from its financial advisor, Investec Henderson Crosthwaite.


"Its all a question of returning value to our shareholders, and we will be considering all the alternatives before the board makes a decision," he added.


Story by Andy Scott