BEALES'S last annual results before its takeover have shown bigger losses and reduced sales.

But the company said the business was strengthening, with improving sales later in 2014.

The company is set to be taken over by property businessman Andrew Perloff in a deal that values it at only £1.2m.

Results just published for the year ending November 2014 show a loss before tax of £4.6m - up £500,000 from 2013.

The net asset value of the business was put at £4.8m, down from £6.6m the previous year.

Gross sales were down 3.6 per cent to £116.2m. Beales said the figure reflected the closure of two branches, the end of its loss-making TV and audio equipment departments and the abandonment of dramatic short-term discount events.

It said profit margins had improved and that operating loss before exceptional items had reduced from £3.3m to £2m.

Beales chief executive Michael Hitchcock said: “Much was achieved during 2014 towards our strategic objectives in the turnaround of the Beales business and since the period end, trading has continued to improve further following actions taken to revitalise the business.

“A quarter-on-quarter improvement in like-for-like sales through 2014, an improvement in gross margin, a material reduction in the operating losses and continued improvement in the operational management of the businesses are all indicators that the business is responding positively to the actions taken.

“The business is stronger as a result, with options to move forward now with a far greater degree of confidence, having secured a bid for the business which comes with up to £2m of capital growth funding.”

Beales operates 29 department stores. The results show Beales owns £19m of freehold and long leasehold property assets and £14.6m of stock, but is described as 'asset rish' yet 'cash poor', with £16.5m of net debt and trading losses over several years.

Mr Hitchcock's report reiterates that the takeover offer was 'disappointing' but says there was no realistic alternative to accepting it. It says the takeover means it will have £1m immediately available in the bank, with another £1m potentially available.

The company employs 1,427 people, of whom 1,133 are women.