Postie Plus warns of more potential banking covenants breaches

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Postie Plus Group, the retailer forced to renegotiate terms of its loans with Bank of New Zealand in October, says it has identified further potential covenant breaches and will be back in talks with its lender.

"Although it is not clear to PPGL whether breaches will in fact occur, the company will advise the BNZ and discuss the bank's requirements for the relevant periods," the Christchurch-based firm says in a statement.

The potential breaches are for the months of November as well as January and April next year, it says.

According to the company's latest annual report, Postie Plus had secured bank loans of about $9.76 million as at August 5 at an average interest rate of 5.15%.

Notes to the accounts show the company did not meet its interest to ebit ratio covenant of 1.5 times for the rolling 12 months to April 2012, though it was in compliance with proprietorship and liquidity covenants.

Postie Plus got a waiver in May of this year but the bank at that time reserved its rights pending an expected return to compliance.

In September, the company reported an annual net loss of $183,000, including one-off restructuring costs. The normalised full-year net profit was $493,000.

The shares last traded at 24 cents, valuing the company at $9.2 million, and have slid 12% this year.

(BusinessDesk)


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7 Comments & Questions

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Perhaps Ms Cameron, who remains the biggest shareholder in Postie Plus, should buy up the whole company and settle it once and for all. Looks like this poor company is not making headway with the present board.

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What, and add it to her loss-making shops in Australia?

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The more money Ms Cameron has to put into these companies, the less she will have for her other "tree-hugging" activities. Good idea, eh!

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The vagueness over its ability to forecast cashflow in the months it risks potential breaches is a major clue for shareholders: end game is on the way.

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Yep, when it comes to retail, the end is nigh.

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This company is a dead duck. The only ones making any money are the execs and the directors, and time has shown none have any merit.

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Unfortunately, I bought shares in the float which was heavily promoted by Neil Craig. This is turning out to be a Feltex played out over a longer period.

[Edited]

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