Concerns raised about strength of Past Times

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The Independent Online

Auditors to Past Times have issued a "going concern warning" over the nostalgia gift retailer’s ability to keep trading in its latest full-year results, but the private equity-owned chain is thought to have recently improved its performance.

The 115-store retailer's pre-tax losses widened to £2.68m for the year to 2 May 2009, but sales jumped by 23 per cent to £37.2m, largely driven by 27 new stores over the period, according to accounts filed at Companies House today.

In an emphasis of matter paragraph, the accountancy firm Hazlewoods said that Past Times' total liabilities exceeded its assets by more than £11m on 2 May 2009. Hazlewoods noted that Past Times Trading - which is owned by Epic Private Equity - needs to renew its overdraft in December 2010 and that the forecast margin of compliance with its bank’s lending covenants is "not large". The auditor said: "These conditions indicate the existence of a material uncertainty that may cast doubt on the company’s ability to continue trading as a going concern".

However, sources close to the company said that the retailer is thought to have delivered earnings before interest, depreciation and amortisation of £2.5m for the eight months to 31 December 2009. It is expected to show a positive net asset value over the same period. In the annual report to 2 May, Past Times said that its shareholders had continued to support the business and provided £10m of funds, which were transferred to a holding company in December 2009. Epic also bought Whittard of Chelsea out of administration in December 2008.

Past Times declined to comment yesterday.

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