A break-up at VAR Coms could be under way as the troubled cabling and comms supplier revealed it has appointed an adviser to assist with potential disposals.
The loss-making firm, which acquired the cabling business of Redstone in November 2013 and buy-and-build comms VAR Actimax last February, broke the news to investors in a stock exchange announcement on Friday.
"The board has appointed an adviser to assist in evaluating its business opportunities," it stated. "This process may or may not result in the disposal of one or more of the group's businesses."
Coms has endured a tumultuous few months, parting company with chief executive David Breith on 1 March just days after announcing it expected to swing to a loss of "at least several million pounds" for its fiscal year ending 31 January. It attributed this to the failure of a restructuring drive to achieve expected cost savings.
Analyst Megabuyte said Friday's announcement suggests that the London-listed firm is heading for a break-up.
"The M&A strategy always lacked coherence, and buying both a low-margin cabling business that Redstone was glad to get shot of and a distressed buy and build (Actimax) was a disaster waiting to happen (as we indeed noted on more than one occasion)," it said.
"The irony is that the voice business is probably the most sensible, profitable and cash-generative bit of Coms today; selling it will release emergency funding, but also raises the question of how long the remaining business can limp on for."
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