Profits sink at DM Group after court hearing
Marketing company DM Group has attributed high costs associated with a recent ruling to an 86 per cent drop in pre-tax profit.
The Ross-on-Wye-based company said profit before tax fell from £2.98m in the previous year to just £410,000 in the six months to 30 June 2011.
Turnover was also down 38 per cent to £8.4m.
DM Group said costs from a court hearing earlier this year, which was brought by the Office of Fair Trading, had "materially impacted" its financial performance.
The company was summoned in relation to certain promotional activity undertaken by several of its subsidiary scratchcard promotion companies. It was handed an enforcement order and told to refrain from selling "misleading" scratchcards.
Although the judgement did not result in a cash fine, DM said court costs had hit its profits.
DM appealed against the judgement and the case has now been referred to the European Court of Justice.
DM's chairman, Adrian Williams, said: "2011 has, for many reasons, been one of the most challenging periods in the group's history, but the group continues to be well managed and its resilience in these difficult times means that it is still well placed to benefit when market conditions start to improve."
