Alba, the loss-making electronic goods distributor, today revealed the sale of its leisure division, to Rutland Partners, the buyout group, for £51.5 million in cash.

The leisure division, which was established last year, distributes products such as microwaves and vacuum cleaners under owned brands including Breville, Bush Domestic Appliances and Hinari and licensed brands including Nicky Clarke, JCB and Dirt Devil.

The sale will allow Alba to focus on its struggling consumer electronics division, which sells devices such as wide-screen TVs under the Grundig brand and was responsible for the wider company running into the red last year.

Under the terms of the deal announced today, Alba will retain ownership of its Rugby distribution centre, it said. It added that the proceeds from the sale will allow it “to significantly reduce debt”.

Sue Cox, the ABN Amro analyst, suggested that the price was disappointing but welcomed the decision to focus on the consumer electronics arm.

Shares in Alba were trading 2.2 per cent lower at 179p, valuing the company at about £92 million.

John Harris, the chairman, said: “Alba continues to focus on the restructuring of its consumer electronics activities and having made much progress already we look forward to the future with improved confidence.”

The company added in a statement: "Over the course of the next three years the board believes that value will be created and realised for shareholders through organic growth, recovery in margins and the proceeds received from the sale of non-core assets."

In the year to March 31, Alba’s leisure division, which employs more than 225 people, generated sales of £129.2 million and profit before tax of £10.6 million and had net assets of £22.1 million and gross assets of £31.7 million.

Overall, Alba reported a full-year pre-tax loss of £44 million.

In a statement today, the group said that sales for the three months to June 30, were down 36 per cent compared with the same period last year, but that margins had improved.

Stock levels at June 30 were 40 per cent lower than at the same date last year, with net bank debt of £58.5 million.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts