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Last Updated: Wednesday, 6 April, 2005, 16:13 GMT 17:13 UK
Lego to sell parks as losses rise
Workmen preparing Legoland in Guenzburg, southern Germany
Lego is talking to potential buyers for its four theme parks
Children's toy maker Lego is to sell its four theme parks, after net losses more than doubled last year to 1.9bn Danish crowns ($328m; 174.9m).

The Danish family-owned firm said it had taken "a good step in the right direction" by cutting costs and discontinuing loss-making activities.

Turnover fell to 7.9bn crowns, from 8.4 bn in 2003, with Lego blaming intense price competition for the decline.

In recent years Lego tried to diversify away from its core building bricks.

It invested heavily in a host of new markets, including computer games, baby products, camping goods and even shoes, which exposed it to the broader stagnation in global toy demand.

Weak dollar brickbats

The Legoland parks are in San Diego, California; Windsor in the UK; Guenzburg in Germany; and Billund, Denmark.

"We are talking to potential buyers, and the process will be finalised during summer," said Lego chief financial officer Jesper Ovesen.

The firm took a write-down of 528m crowns in its 2004 accounts as a result of its decision to sell its Legoland parks.

And toy sales slipped 7% to 6.7bn crowns from 7.2bn crowns in 2003. Lego said half of this loss was due to exchange-rate movements, particularly the weak US dollar.

However, its earnings before special items, financial income and expenses, and tax, improved from a loss of 1.06m crowns in 2003 to a profit of 103m crowns in 2004.

'Leaner' Lego

Revealing the latest figures on Wednesday, chief executive Jorgen Vig Knudstorp said: "it is a positive development that we managed to improve our result before special, non recurring items by more than one billion Danish crowns, and in global terms halted what had been a decline in our market."

Lego said it envisages "a leaner but financially stronger and more focused" group during 2005, one "ready to deal with a low growth industry and product sector".

In future, the group's main thrust will be in the field of classic construction toys, it said.

Lego's biggest recent successes have come from licensing deals with blockbuster entertainment franchises, especially Harry Potter and Star Wars.

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02 Mar 01 |  Business

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