Interims for HMV released today. I’m surprised the company has managed to keep going this long. We’ve been in the end game for a long time, and it looks like we’re getting ever-closer to being checkmated.
Here’s the gruesome news: sales down 13.5%, like-for-like down 10.2%. This continues the trend that has existed for some time. Operating losses were 36.1m (2011: 50.1m loss). Underlying net debt has increased from 163.7m to 176.1m.
New CEO and CFO (Ian Kenyon) recruited in September 2012.
Here’s the killer:
The next covenant test date under the banking facility is at the end of January 2013. In light of current trading performance, and market conditions, it is probable that the banking covenants will not be complied with at that time. However, the Group is currently operating within the terms of its banking facility and the Directors continue to maintain regular and constructive discussions with the Group’s banks. The Directors believe that the Group will be able to meet their liabilities as they fall due, including the £30m amortisation payment due in January 2013, and will have adequate resources to continue in operational existence for the foreseeable future.