Jessops investors face wipeout

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Jessops said yesterday that shareholders are likely to be wiped out as the troubled camera retailer posted a half-year loss of £13m and warned of potential further redundancies.

The 211-store retailer – which had £61.7m of net debt on 29 March – said that talks with its main bank HSBC towards a "solvent solution" are ongoing. A resolution is expected before the end of the summer and the most likely option is a debt-for-equity swap that will leave HSBC as the majority shareholder. Jessops, floated in 2004, is expected to de-list from the London Stock Exchange.

However, David Adams, the executive chairman of Jessops, said: "Regrettably, against the backdrop of the challenging retail environment and the historic level of debt, the board believes that it is unlikely that any value will be attributed to shareholders." Yesterday, shares in Jessops fell by 4.13p, or 62.29 per cent, to 2.43p.

But Mr Adams said: "I am confident there is a future for the business. We are saddled with the decisions of the past. There was a rush for space [between 2004 and 2007] and the business got a bit dizzy and expanded too quickly without the proper infrastructure and incurred too much debt."

For the six months to 31 March, Jessops' total pre-tax loss rose to £13m from £11.2m the year before. Over the half-year, its like-for-like sales fell by 4 per cent. Jessops, which has 2,000 employees, is to increase the proportion of part-time store staff, which could mean redundancies, although Mr Adams declined to provide figures.