Alldays losses rise as debt payments mount

Alldays, the convenience store chain battling to overhaul its ownership structure, said higher interest rates were to blame for an interim pre-tax loss of £5.5m, up from a previous loss of £3.4m.

Alldays, the convenience store chain battling to overhaul its ownership structure, said higher interest rates were to blame for an interim pre-tax loss of £5.5m, up from a previous loss of £3.4m.

The chain has borrowed heavily since last autumn to bring more stores under direct control. With a £200m overdraft facility, it has increased company-owned stores from 239 to 675, buying up 27 regional development companies (RDCs).

The chain has so far spent around £100m on restructuring and integration, and is in negotiations with the five remaining regional companies over the future of 93 additional franchises.

Its chairman, George Duncan, who last year brought in two former Sainsbury's executives to aid the restructuring, said: "Our strategy has allowed a streamlining of operations and clearly there is scope for significant reductions. We are discussing the most appropriate way forward with the five remaining RDCs, whether to buy them in or go forward in a joint venture. Unlike the others we have bought in, these are profitable enterprises."

Shares in the group, which topped 600p in 1998, closed flat yesterday at 32.5p.

Alldays said the new ownership structure had already cut £5m from network overheads. Like-for-like sales for the chain rose 7.1 per cent in the 26 weeks to 30 April, and turnover was up 21 per cent to £257m as a result of higher sales and store acquisitions.

The finance director Stuart Lawson said: "We have finished the half-year having borrowed £173m overall."

Esther Bannister, an analyst at HSBC Securities, said Alldays had adopted the right strategy but had yet to turn the corner. "They are midway through quite an unpleasant restructuring process. It's a big job and it's going to take some time," Ms Bannister said.