Jessops, the UKs biggest photographic retailer, has reported pre-tax losses in the year to September 30 of u00a319.1million, more than double its u00a39million loss in 2007. The total loss, after tax, was u00a350.2m.
The company also warned that it was in danger of breaching its covenants under its existing banking facilities and would need a fundamental restructuring of its debt to survive.The news caused shares in the chain to drop by more than 27% to 2p. Two years ago, they were worth over 150p.
Like-for-like sales dropped 6.5% last year, and although sales have risen 3.8% in the last two months this has been due to price promotions that have affected profit margins.
Chairman David Adams said that these were the worst market conditions for camera sales in many years, but he was confident that a restructuring agreement with its banker, HSBC, would be reached within weeks, possibly in a debt for equity deal. The bank already holds a 15% stake in the company.