Jessops agrees £8m bank loan increase
September 15, 2011
Photographic retailer Jessops has arranged to borrow a further £8m from its bank HSBC. At the same time the group has agreed to reduce its seasonal overdraft facility.
The financial restructuring will see Jessops’ owner Snap Equity Limited increase its existing loan with HSBC from £20m to £28m in a deal agreed on 30 August.
The loan will be repayable in eight quarterly instalments of £500,000, beginning on 28 September 2012, followed by a final payment of £24m on 29 September 2014.
The details are contained in company accounts filed by Snap Equity Ltd and Jessop Group Ltd at Companies House.
The group has agreed a reduction in its uncommitted overdraft facility which expires in November 2011. The overdraft allowed the group to borrow up to £18m.
Under the new terms, Jessops will be able to borrow between £2 and £10m as an overdraft, on a seasonal basis as before.
Jessops says it continues to receive support from its bank.
In the Directors Report, Snap Equity bosses state: ?In discussions with the directors, the lenders have indicated that subject to the borrowing requirements of the group being in line with their expectations, which are consistent with the directors? forecasts, it is their [the lender?s] current intention to make facilities available at a level adequate to meet the funding requirements at and beyond the formal facilities renewal date in November 2011.?
Meanwhile, accounts show that Jessops notched up a profit of £111.3m for the year ended 2 January 2011.
However, after stripping out non-recurring items relating to the corporate restructuring, Jessops made an underlying loss of £3.1m.
This marks an improvement on the 15-month period to 3 January 2010 when Jessops recorded a loss of £48.1m (£11.2m loss after accounting for non-recurring costs).
Jessops says its like-for-like sales remain strong, up 5.3% for year to 4 September 2011.
?Total online sales continue to grow strongly and have more than doubled,? said Jessops chief executive Trevor Moore.
?The high level of online sales collected at store, through our dynamic multi-channel platform, provides a flexible service experience for our customers.’
He added: ?Whilst we anticipate market conditions will remain challenging in the foreseeable future, with our multi-channel proposition supported by innovation, we are well positioned to deliver profitable market share growth.?
The chain?s refurbished stores achieved an ?average uplift? of more than 30%, said Moore, adding that more than half of Jessops shops will sport a new black frontage by the end of this year.
The photo retailer’s main operating company was sold to Snap Equity Limited in a deal thrashed out in September 2009.
The restructuring meant that HSBC forgave £34m of its debt owed by Jessops at that time and that Snap Equity Limited would be 47% owned by HSBC.
Jessops, which is Britain’s largest high-street photo retailer, was de-listed from the London Stock Exchange in January 2010.
On Tuesday, Jessops opened a new store at Westfield Stratford City in East London, employing 19 new staff.