🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

UPDATE 3-Blacks Leisure swamped by surfwear drop, charges

Published 05/29/2009, 06:02 AM
FRAS
-

* Pretax loss 6.8 million pounds vs forecast loss of 8 million

* Exceptional charges of 7.6 million pounds

* No final dividend

* Says request to Lloyds for more debt "a big ask"

* Shares unchanged (Adds CEO comments)

By James Davey

LONDON, May 29 (Reuters) - British outdoor goods retailer Blacks Leisure Group Plc plunged into a pretax loss as its surfwear business continued to struggle, and said its request for more debt from lender Lloyds Banking Group Plc was "a big ask".

The firm also said it needs a good camping season to boost its fortunes and was hopeful of benefitting as cash-strapped Britons cut out foreign holidays.

"The first half outlook will depend on the key second quarter and the success of our camping and summer clothing lines," Chairman David Bernstein said on Friday.

Shares in Blacks, which have lost three quarters of their value over the last year, were unchanged at 37.5 pence at 0929 GMT, valuing the business at 16 million pounds.

Many UK retailers are struggling as consumers rein in spending amid rising unemployment and falling house prices.

Blacks reported a pretax loss before exceptional items of 6.8 million pounds ($10.83 million) for the year to Feb. 28, versus a profit of 0.3 million the year before.

Analysts on average forecast a loss of about 8 million pounds, according to Reuters Estimates.

The outcome reflected a loss in the surfwear division, comprising Freespirit and O'Neill stores, of 7.8 million pounds, partly offset by a profit in the outdoor division, comprising Blacks and Millets stores, of 6.3 million pounds.

Revenue fell 9.1 percent to 267.6 million pounds, although the gross margin increased 0.6 percent to 54.3 percent.

The firm also booked exceptional charges of 7.6 million pounds for property and goodwill write-offs, onerous lease provisions and restructuring costs, which meant its reported pretax loss widened to 14.4 million pounds from 9.3 million pounds in the previous year.

As was the case at the interim stage the firm will not be paying a dividend.

Blacks said its like-for-like sales fell 0.5 percent in the 12 weeks to May 23, with outdoor up 1.2 percent and surfwear down 10.1 percent. Reduced gross margin over the period of 52.3 percent reflected price cutting to drive sales.

Last week Blacks secured a three-month standstill deal with lender Lloyds, which extended its 35 million pound banking facility to the end of August.

It remains in talks with Lloyds regarding a longer term facility that will enable it to develop its outdoor business and exit surfwear by converting the stores.

Chief Executive Neil Gillis declined to say how much additional debt he was after.

"It's a big ask that we've put in place, it's more than we've currently got and therefore it's not surprising the bank want a little bit of time," he told Reuters. Blacks terminated bid talks with an unnamed suitor in March. Its largest shareholder is Mike Ashley's Sports Direct International Plc, which owns 29.9 percent. ($1=.6280 pounds) (Editing by David Cowell and Rupert Winchester)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.