Editor’s comment: In a statement on its 2007-2008 trading, Jessops seems to be managing the continuing difficult trading situation it finds itself in and although its business shrank by around 6%, continuing a long term trend, the company appears to have costs under control and so the profitability of the business is stable. This has been underpinned by continuing financial support from the company’s bank. The UK’s biggest high street retailer that specialises in photography products still faces an uphill struggle and all eyes will be on the company’s performance during the critical Christmas season. With a weak pound, the cost of imported items like cameras, printers, lenses and more are cheaper, so prices can be more competitive. There has already been a sign that UK prices for DSLRs are looking good for continental buyers compared to their local prices. Jessops, I’m sure, would welcome tourist customers this Christmas. One can only speculate whether or not the financial turbulence we’re all experiencing will be the major factor when things are analysed early next year.
JESSOPS PLC PRE-CLOSE TRADING STATEMENT
Jessops plc (“Jessops”) will announce its preliminary results for the year ending 30 September 2008 at the beginning of December 2008. Prior to entering its closed period, the Group today issues a trading statement.
Jessops is pleased to announce that it has signed an extension of its banking facilities to 31 December 2011, which are on significantly reduced interest rates.
As part of this extension the £7 million deferred financing fee that was due on 31 December 2008 has been reduced to £5 million and extended until 31 December 2011. In exchange for this reduction and extension Jessops will grant warrants over a further 5% of its share capital to HSBC Bank plc.
Like for like sales for the 51 weeks to 21 September 2008 were down (6.4%) compared to the (5.6%) announced on 15 July 2008.
As a result of management actions the full year gross margin to 30 September 2008 is expected to improve by 0.8% points over the same period last year despite the challenging retail environment throughout the key summer trading period.
The cost reduction exercise that was announced on 29 May 2008 has continued to deliver ongoing benefits and the Board is able to reaffirm that the EBITDA for the year to 30 September 2008 will be in line with the guidance given on 15 July 2008 of more than £4.4m.
Commenting on today’s statement, David Adams, Executive Chairman said:
"Our progress this year has been recognised by the continued support from HSBC Bank plc and I am pleased to announce that our existing facilities have been extended to 31 December 2011. This is a significant step forward as it removes any uncertainty over our funding for the foreseeable future.
We remain confident that we have the plans in place to ensure continued progress.”
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