Sharechat Logo

Pumpkin Patch shares biggest faller on NZX as board mulls capital constraints

Thursday 20th October 2016

Text too small?

Pumpkin Patch shares were the biggest decliner on the NZX today as the deadline looms today for directors to propose measures to address its capital constraints with lender ANZ Bank New Zealand. 

In its full-year results published last month, the Auckland-based childrenswear retailer told investors that its directors had given an undertaking to the bank that it would put forward proposals by Oct 20. 

The capital constraints were highlighted in the accounts as a "material risk" to the ongoing viability of the business. 

Its debt to ANZ rose to $46 million from $39.1 million in the year to the end of July 2016. It posted a loss of $15.5 million in the same period. 

The directors said the 2016 financial year was the first in a four-year turnaround plan, and "very good progress has been achieved, although this is not immediately apparent from the headline numbers reported." The decline in sales was put down to the fall in its international wholesale business and online channels in the northern hemisphere, which have historically delivered profits.

The directors warned that the business remains over-leveraged and capital constrained, with "our ability to move forward impacted by the lack of available capital for debt reduction and reinvestment." The board's primary focus was described as assessing what options are "realistically available" to address its position.

Shares fell 16.6 percent or 1.2 cents to 6 cents in trading on Thursday. Shares have fallen 43.3 percent since the start of the year.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite

IRG See IRG research reports