Flying Brands shares lost more than 50% of their value this morning after the multichannel retailer warned it was in danger of breaching the terms of its banking convenants following disappointing autumn trading.
At the end of the autumn selling season, the performance of Gardening Direct, which sells garden plants and accessories online and through catalogues, was “significantly below management expectations,” while trading across other parts of the business also failed to meet expectations.
Flying Brands‘ portfolio also includes Flying Flowers, Flowers Direct and Garden Bird Supplies, as well as daily deals site Dealtastic.
Shares in the Jersey-based company this morning fell by more than 50% in response to the news, slipping from their opening price of 18.75p to 8.25p by 12.20pm.
In today’s trading statement the company said: “We are currently reviewing our forecasts for the rest of the year in light of this but it is already clear that, in the absence of any further action, we would breach our banking covenants when these come to be tested in the second half of October. This would result in the need to further renegotiate our banking arrangements or seek a waiver from the bank.”
The company is now looking to sell property assets in order to raise money. Flying Brands previously issued a profits warning in April this year, citing increasing competition and the “increasingly challenging consumer environment.”
