Cash call hits Rhino shares

More than 30 per cent was wiped off the value of shares in Rhino Group, when the retailer of computer and video games announced a cash call along with confirmation of previously flagged full-year trading losses.

The shares fell 4p to 8p as the group revealed it needed a £3.7m rights issue - on the basis of three new shares for every five already held - to fund working capital requirements.

The accouncement came as Rhino reported that in 1994 it fell £2.67m into the red against a restated £1.13m profit in the previous year.

The company, which issued a profits warning in January, has also passed the dividend (0.5p). Directors said yesterday that the 1994 losses would result in a cash shortfall during this year, and that bank credit facilities of £6.7m were dependent upon the rights issue.

Rhino said that without the proceeds of the cash call it would not have enough funds for its working capital needs.

The company started 1995 with excess levels of stock, but said these had now been reduced by £3m. Rhino said this was possible because some stock was bought on a sale or return basis and because of sales volumes in January.

A cost reduction programme initiated at Christmas would achieve cost savings of £700,000 in 1995 after restructuring expenses, the board said. Rhino said its problems had been triggered by a downturn in the video games and computers market last year.

A company statement said: "The board believes this was a temporary downturn largely attributable to the premature announcement by suppliers of major new technology which will not be released in the United Kingdom until the second half of 1995. In addition, margins during the Christmas period were eroded as a result of discounting by competitors."

Rhino said 1995 and 1996 were expected to be important years for the British computer games industry, and that the group was well-placed to benefit from the expected increase in the market.

Sony has announced that it will launch the Sony Playstation, a CD-based machine, in the autumn.

Sega is expected to launch its new CD machine, the Sega Saturn, at about the same time.

The statement added: "These two new systems, which provide customers with faster responses, significantly improved graphics and stereo sound, have already been released in Japan and have resulted in substantial retail sales."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Account Manager / Membership Manager

£35 - 38k + Benefits & Bonus: Guru Careers: We are seeking an Account Manager ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

Guru Careers: Associate Director

£50 - 80k: Guru Careers: We are seeking an Associate Director for the Markets ...

Guru Careers: Associate Director / Director of Sound Practices

£60 - 100k: Guru Careers: Our client is looking for an Associate Director of S...

Day In a Page

Giants Club: After wholesale butchery of Idi Amin's regime, Uganda’s giants flourish once again

Uganda's giants are flourishing once again

After the wholesale butchery of Idi Amin's regime, elephant populations are finally recovering
The London: After 350 years, the riddle of Britain's exploding fleet is finally solved

After 350 years, the riddle of Britain's exploding fleet is finally solved

Archaeologists will recover a crucial item from the wreck of the London which could help shed more light on what happened in the vessel's final seconds
Airbus has patented a jet that could fly from London to New York in one hour

Airbus has patented a jet that could fly from London to New York in one hour

The invention involves turbojets and ramjets - a type of jet engine - and a rocket motor
10 best sun creams for kids

10 best sun creams for kids

Protect delicate and sensitive skin with products specially formulated for little ones
Tate Sensorium: New exhibition at Tate Britain invites art lovers to taste, smell and hear art

Tate Sensorium

New exhibition at Tate Britain invites art lovers to taste, smell and hear art
Ashes 2015: Nice guy Steven Finn is making up for lost time – and quickly

Nice guy Finn is making up for lost time – and quickly

He was man-of-the-match in the third Test following his recall to the England side
Ashes 2015: Remember Ashton Agar? The No 11 that nearly toppled England

Remember Ashton Agar?

The No 11 that nearly toppled England
Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks