Pentos makes 45m pounds call and drops dividend: Retail group announces pounds 70.6m loss as banks agree to standstill on debts
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Your support makes all the difference.PENTOS, the stricken retail group that includes Dillons, Rymans and Athena, launched a widely touted pounds 45m rescue rights issue yesterday after revealing pre-tax losses of pounds 70.6m for 1993, a scrapped dividend and plans for a capital reconstruction.
The company's banks have agreed to a standstill on its pounds 86m debts and, subject to the rights issue, secured facilities of up to pounds 66.7m after that.
Pentos also disclosed that Terry Maher, ousted as executive chairman last November, is to receive compensation of pounds 400,000.
Following Mr Maher's departure Sir Kit McMahon took over as non- executive chairman and Bill McGrath as chief executive. In December the company warned of impending substantial losses and write-offs.
Sir Kit said reduction of debt had been identified as an immediate priority. New store openings had been curtailed while opportunities for significant cost savings and working capital control were being pursued.
Pentos's losses, which compare with a profit of pounds 4m in 1992, have been struck after pounds 56.5m of exceptional items. These were made up of pounds 31.9m of stock adjustments and extra operational costs together with a pounds 23.9m charge on the disposal and termination of businesses, mainly at Rymans Computer Stores.
Following a loss of pounds 8.6m at Athena, Pentos made an operating loss of pounds 7.3m before exceptional items against a profit of pounds 13.7m. It is to sell Athena's non-retailing interests along with what remains of Rymans Computer Stores, which sold 53 branches in February.
As a result of the losses, Pentos's net assets collapsed from pounds 79.3m to pounds 21.5m, leaving it with a deficit on the profit and loss reserve of pounds 53.9m. In order to be in a position to resume dividend payments, Pentos will apply to the courts for permission to reduce its share capital.
Sir Kit said there would be no dividend in 1994 and policy would be reviewed in the light of future performance. Net borrowings, having risen from pounds 44.1m to a seasonal low point of pounds 69.3m at 31 December, rose further to pounds 86m in early March.
Terms of the rights issue are four new shares for every three existing shares at 25p. This was a smaller discount to Monday night's closing price of 29.5p than had been expected and Pentos shares closed only 0.5p down at 29p.
Since the year-end Dillons has shown like-for-like sales growth of 8 per cent and Athena 4 per cent, while Rymans the Stationer was flat.
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