30 October 2013 – update on trading/financial position
The group has announced that it has agreed with its banks to defer its covenant testing dates to 3 February 2014 from 30 October 2013 after continued talks with its banks. This is clearly very good news and is perhaps an indication that things at the group are not as bad as previously thought. Although trading remains challenging, the newly appointed CEO believes that there is a sustainable and competitive future for the group. We would expect that close control of costs and attention to future lending, together with a restructuring of some of the activities will lead to continuing support from the group’s banks. Although the shares have bounced by 7.5p today there could be further recovery to come. SPECULATIVE BUY.