There was, however, relief that the results were not accompanied by a rights issue, as some had expected, and the group's shares, down 7p at one point, recovered to close 2p lower at 49p.
But Peter Carr, chairman, said that implementation of a five-year plan at the speed he would like would require extra facilities. 'How we will raise those we have not yet thought through,' he added.
Borrowings rose from pounds 5m to pounds 7.4m in the year to July but net assets dropped from pounds 15.5m to pounds 9.1m, which meant that gearing soared to 81 per cent from 32 per cent a year ago. It has since increased to pounds 11m as the group stocked up for Christmas.
Mr Carr said the group's two lead bankers had confirmed they would renew its facilities. Julie Ramshaw, retail analyst with Morgan Stanley, expects it to launch a rights issue early next year.
Amber Day lost pounds 2.1m before tax, an improvement on the pounds 7.8m lost the previous year, but largely due to a drop in losses on disposal from pounds 14.6m to pounds 1.9m. At the trading level profits fell from pounds 8.4m to pounds 4.4m after paying pounds 1.13m compensation to Philip Green, the former chairman and chief executive, and pounds 500,000 to Stacey Ellis, his successor as chairman.
Exceptional charges were pounds 8.99m for closures and property provisions. The final dividend was cut from 2p to 0.25p, making 1.35p (3.1p) for the year. The loss per share was 3.89p (3.86p).
The core What Everyone Wants chain increased profits from pounds 10.1m to pounds 10.3m on sales 13.6 per cent higher at pounds 97m. Mr Carr said the reduction in margins was partly due to the introduction of Sega games and perfumes, which carry lower margins, and because prices were kept low to keep cash flowing in.
Margins in the current year are likely to be similar to the 10.6 per cent achieved last time and Mr Carr said he was expecting margins to rise by just 0.5 percentage points in the next five years.
Sales in October rose 24 per cent, or 11 per cent if new space is excluded, compensating for a poor August and September to leave the first three months of the current year 13 per cent ahead.
Eight stores are to be opened this year, bringing the total to 64, and the group aims for 125 within five years. Mr Carr said he was confident that discount retailing would grow faster than other parts of the sector in the next 10 years.Reuse content