MTC fell 15.5% today to 21p, making it the top faller in the All-Share index.
It issued a statement regarding share price movement and media speculation (emphasis mine):
expect … adjusted group profit before tax to be at the lower end of the previously guided range of £1-5m … we are working with our financing partners with respect to our financing needs …
will therefore require waivers of certain financial covenants
So, not good, then. As soon as covenants is mentioned, you know the share price isn’t going up.
Stockopedia’s Graham N reported on MTC on 8 Jan 2018 (https://www.stockopedia.com/content/small-cap-value-report-mon-8-jan-2018-hat-sys1-avg-mtc-crw-tst-294058/):
these results are worrying to say the least. For the 12-week Christmas period, UK like-for-like (LFL) retail sales are down 7.2%, and even UK online sales are down 6.9% … the company is striving to protect a brand that most parents don’t care about … I would not choose to put any more money into this company
The shares dropped 27% to 45.5p on the day. As we saw, just because a share price tanks, it doesn’t mean it cannot go any lower. It now sits on less that half the price of less than two months ago.
So debt will be about £50m (“slightly better”, according to the company), and PBT will be somewhere between £1-5m. The phrase “they’re screwed” comes to mind.
I had written back in January (https://mcturra2000.wordpress.com/2018/01/08/follow-up-on-deb-and-nxt-plus-mtc/) that MTC was on a “long, slow, painful decline to irrelevancy”, and the whole in-store cafes and yoga studios (yes, they actually did that) was a sign of utter desperation.
Every day it inches closer to being another HMV and Woolworths.
Stay safe out there.