Amateur Photographer Magazine

 Jessops announces results of strategic review -

Thursday 21st June 2007

Statement supplied by Jessops

21 June 2007

JESSOPS PLC

Completion of Strategic Review
Interim Results for the 26 Weeks to 1 April 2007

Jessops, the UK's leading photographic retailer, today announces the outcome of its Strategic Review, its new banking facilities to December 2008 and its interim results for the 26 weeks to 1 April 2007.

The Strategic Review addresses the fundamental issues that face Jessops in this challenging market. This strategy re-positions Jessops as a true multi-channel retailer with a strong presence in the growing digital printing services market in addition to continued leadership in digital cameras. This will be supported by market leading customer service.

In addition Jessops announces several immediate profit enhancing initiatives to address the cost base across the store portfolio and its support functions. This will create a strong platform for future growth.

Strategic Review – key points

• Increased focus on growing digital printing and photo merchandise markets, building on recently launched multi-channel collect@store service;
• Focused new 'bricks & clicks' strategy via jessops.com and Jessops Picture House;
• Planned closure of 81 stores – 47 overlapping, 31 loss-making and three subject to redevelopment;
• Remaining 234 stores are profitable and cash generative;
• Sale of aged stock through outsourced clearance specialists;
• Reduction in central overheads by 20%, and total overheads reduced by over £15m; and
• Non-recurring costs of restructuring actions in the full year of 2007 amount to around £25m, of which £6.9m are cash costs of closing the stores and re-organising the support centre, for which funding is in place

New banking facilities

• £66.5m facility agreed with HSBC to December 2008, of which £60m is committed;
• Terms agreed with Pension Fund Trustees; Pension Regulator's clearance is being sought;
• Interest charged at up to 5.25% over LIBOR;
• Deferred re-financing fee of £7m, payable in December 2008; and
• The issue of Warrants to HSBC over unissued ordinary shares equivalent to 10% of Jessops' issued share capital (5% exercisable from June 2007 and 5% after the AGM to be held in January 2008)

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