Clinton Cards to fight back with refinancing and robust sales

The greetingS card retailer Clinton Cards is expected to reveal today it has renegotiated its loan facilities, alongside better-than-expected interim trading results, in moves that will rebuff speculation about its financial stability.

Clinton Cards is understood to have renegotiated with its banks debts comprising a £60m working-capital facility and a £12m loan, which is due to be repaid in December. However, market sources said the retailer has paid a substantial fee for the refinancing.

Clinton was under pressure as it had to sign the new loans in time for its auditors to be able to sign off the company's final accounts as a going concern. David Stoddart, an analyst at Altium Securities, said: "The key thing for retailers at the moment is to have a facility to carry them through the recession."

Clinton Cards, which operates the eponymous chain and Birthdays fascia, declined to comment.

Today, Clinton Cards is expected to say that trading has been better than the market expected for the 26 weeks to 1 February, boosted by additional sales from the collapse of Woolworths and the Celebrations Group, which both fell into administration late last year. The administrator to Celebrations Group, which ran 288 Cardfair and Card Warehouse stores, sold 74 shops to rival Card Factory in December, but could not find a buyer for the remainder of the estate.

In January, Altium forecast that, given the deteriorating retail environment, Clinton's underlying sales would remain negative in the second half, leaving its full-year like-for-like sales down by about 5 per cent.

In January, Clinton said that group like-for-like sales fell by 4.1 per cent in the five weeks to 4 January 2009.

On the same day, the retailer said it had made its fourth scheduled loan repayment of £12m on 15 December 2008 and that its final instalment of £12m will be repaid in December.

Shares in Clinton have plummeted by 83 per cent over the past 12 months. Yesterday, the retailer's shares inched up by 0.02p to close at 9.65p.

This month, Altium forecast an adjusted full-year pre-tax profit for Clinton of just £200,000, compared with a profit of £19.5m last year.

Last month, Barry Hartog, Clinton's group commercial director, vehemently denied speculation that it was considering measures such as a company voluntary arrangement to protect itself from creditors.

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