Card Factory PLC gets one-month waiver to avoid covenant breaches amid
The retailer previously said it would breach banking covenants by the end of January because of the current lockdown, although it had access to £200mln of debt facilities
PLC () said its banks have provided waivers in respect of anticipated covenant breaches until February 28, 2020, amid the coronavirus (COVID-19) lockdown.
The group said the waivers are based on the greeting cards retailer’s cash flow projections, subject to certain conditions.
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said it continues to keep in touch with its banks and has agreed to continue exploring potential solutions, with scope for further extensions to the waivers as this process continues.
Earlier this month, the firm said that it was going to breach its banking covenants by the end of January because of the current lockdown, although it had access to £200mln of debt facilities.
The group is currently not allowed to open its shops as a non-essential retailer. During 2020, it lost a third of possible trading days because of mandatory closures.
Card Factory said its revenue for the year to January 31, 2021, is expected to be £284mln, down from £451mln a year ago, and it anticipates swinging to a £10mln loss before tax from the previous £65mln profit.
“Today’s news that constructive discussions with its banks continue is encouraging and we are hopeful that these will be brought to a positive conclusion in the coming weeks,” analysts at Liberum Capital said in a note to clients.
“We note that while the group will clearly be impacted by store closures over the coming weeks and months, it was seeing improving trading trends prior to the latest lockdown and its history of very strong cash generation during more normal times should be taken into account by its lenders.”
Card Factory shares shed 2% to 35.3p on Friday at the opening bell.
Read More: Card Factory PLC gets one-month waiver to avoid covenant breaches amid