The City was like a morgue this week and not just because of the lack of business. By a strange coincidence, more than 30 companies chose the season of goodwill and notoriously low vigilance to release news that their shareholders would probably not have wished to find in their Christmas stocking.
In a hard-fought competition the prize for delivering the biggest turkey went to the software and services group Cedar. Its shares, which had already shed 96 per cent of their value this year, halved to 4p yesterday when the chairman, John Stanley, announced pre-tax losses up from £5.8m to £53.7m and said he was in talks to raise more money which might lead to a takeover bid worth only 5p a share. This would value Cedar at £5m, 0.4 per cent of its worth just a year ago.
Mr Stanley admitted the group's net debt had risen by £6.6m to £38.3m in the past three months, it had no committed banking facilities and its overdraft was repayable on demand. "At present the group is entirely dependent upon the continued support of our bank, HBOS," he added, blaming Cedar's troubles on UK and US customers delaying or cancelling contracts.
As the company does not have enough working capital to survive more than another nine months, Mr Stanley warned the directors may have to file for insolvency if the rescue talks fail.
Also yesterday, the Govett European Technology and Income Trust confessed it had had a "frustrating year"; the electronics group TCT International suspended its shares pending clarification of its position; the music and media minnow Channelfly called a meeting to raise more finance and Riceman Insurance Investments had to tell shareholders it had not yet found a deal to take the company in a new direction.
The biggest loss of the week was unveiled by Wiggins, the property group, where the shortfall doubled to £13m. The company wants £140m to pay debts and expand its airport network.
In all, a dozen companies announced losses last week, mainly in the notoriously black hole of Christmas Eve, where most disappeared never to be seen when newspaper City pages resurfaced on Thursday.
That was the day the Aberdeen fund management group decided to tell the world that two of its vehicles the High Income Trust and the Emerging Economies Investment Trust had had less than sparkling performances.
Danny Kelly, a founder of 365 Corporation, the internet business, wanted to spend Christmas freed from the cares of office, so he quit last Monday. And KeyWorld thought that was a good time to reveal that Criterion Life had terminated its agreement with it. The telecommunications equipment maker Dataflex Holdings closed its Los Angeles office and Avanti Partners quit the Alternative Investment Market.
Fans of Nottingham Forest, which owns the Nationwide division one soccer team, had to be alert to discover an injection of capital was "essential" amid a messy court battle between investors and Doughty Hanson, the private equity firm which holds a 40 per cent stake.Reuse content