Albemarle & Bond defers covenant testing date

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Pawnbroker says agreement shows it is working closely with the banks.

Troubled pawnbroker Albemarle & Bond has agreed a further deferral of the company’s covenant testing dates until February next year, marking its second deferral since September 30.

Albemarle & Bond has agreed with its lending banks to move the date to next year, giving it more time to focus on the turnaround of the business.

A statement released by the company said it is continuing "constructive and supportive discussions with the banks".

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Albemarle said it will continue to explore all options to maximise value for all stakeholders whilst resolving the current financing and banking covenant issues.

On September 30, Albemarle & Bond issued a profit warning and closed 33 of its pop-up cash-for-gold stores, owing to weakened gold price.

It said at the time that its two core businesses of pawnbroking and gold buying are directly linked to the gold price and as such declining prices have created "significant uncertainty" over the company’s prospects for the current financial year and its profitability.

However, it did state that the company’s profitability before exceptional items is within the range of market estimates for its financial year to 30 June 2013.

Albemarle’s new chief executive Chris Gillespie and new chief restructuring officer Colin Whipp were both bought in early this month, and the company says both making good initial progress reviewing operations.

The company’s board said it will provide updates on its plans as soon as it is appropriate and will release the 2013 final results as soon as is practicable thereafter.

Chief executive Gillespie said: "[The] further covenant testing date deferral agreement is testament to our constructive working relationship with the banks and to their support while we explore a range of financing, strategic and turnaround options.

"Since my appointment as chief executive, I have been focusing on operating our retail estate on a business as usual basis whilst considering the future strategic direction of the company. Colin Whipp and I are also considering turnaround actions to improve trading performance. I am encouraged by the quality of our stores, our offering and our people and am confident that there is a sustainable and competitive future for the business."

As of October 25 2013 the company’s net indebtedness stood at £49.9m compared to its revised £53.5m banking facilities. 

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