Mothercare expects to remain within banking covenants
Mothercare has responded to reports over the weekend that it was looking to renegotiate its banking deals only seven months after it secured Â£90 million in funding.
In a statement issued today, the mother and baby products retailer said it was in regular dialogue with its banks in line with “normal practice” and expects to remain within its banking covenants. It also reiterated that its underlying pre-profit for the year ended 29 March 2014 is expected to be in line with current market forecasts with net debt in line with previous guidance.
The announcement follows reports in the Sunday newspapers that the retailer had asked its lenders for breathing space and was trying to persuade HSBC and Barclays to relax banking covenants.
Today Mothercare said: “Mothercare notes the recent media speculation regarding its banking facilities. In accordance with normal practice Mothercare is in regular dialogue with all of its financing partners, including the banks.
“Mothercare continues to discuss with its banks its future plans for the business and the consequential funding requirements, and is grateful to them for their continued support. Mothercare is and expects to remain in compliance with the provisions and covenants of its facilities.”
The retailer, which also operates the Early Learning Centre stores, has been working to turn its business around after struggling against declining sales in the UK. However, last month Mothercare said it expects to meet its full year underlying profit forecasts after seeing improved trading both in the UK and overseas in its fourth quarter.
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