Once bought for £175m, the social networking site Friends Reunited is now worth just a fraction of that; provoking its current owners to re-evaluate the asset.
Dundee based publishers DC Thomson were forced to restate their associated accounts to reflect the intangible asset’s productive value of just £5.2m. This means that more than £20m of the purchase price paid to broadcasters ITV for the site, is now officially accounted as a “goodwill” payment.
However, though this is clearly a blow to its online ambitions, the company still managed to boost their online turnover share; rising from 4 per cent to 10 per cent.
The family-controlled company, most commonly associated with comic titles: Oor Wullie, the Broons and The Beano, also has total assets to the value of £1.2bn. This includes an operating pre-tax profit of £28.6m in the year to March – a 5 per cent increase from the previous year.
These figures were, in part, helped by the closure of a Dundee print plant, a decision which company secretary, Irene Douglas, admitted had pained them. They are also moving ahead with another closure, this time in Glasgow, over the next two years.
Throughout the economic difficulties, many Scottish companies have had to take hard decisions. However, through innovative financing strategies such as invoice factoring, and controlling staff costs at all levels, redundancies and wide scale closures could be avoided.
It is unclear whether such strategies have been considered by DC Thomson; a very private company no matter the economic climate. However, they would certainly have not budgeted for such a drop off in the value of a social networking site in this day and age.