Pumpkin Patch appears to be facing even worse conditions as the end of the financial year approaches, The Auckland based childrenswear retailer has warned shareholders to brace themselves.
According to NZ Herald, Shares of Pumpkin Patch dropped 12 per cent to a more than two decade-low of 30 cents, and have tumbled 62 per cent this year.
“The outcome of this trading period will materially affect our financial result and the outlook for the remainder of the year,” Schuyt said in speech notes published on the NZX. “Should trading not deliver to expectations over this period, or worsen over the first half of next year, then there is a risk that the company may breach banking covenants in the latter part of this financial year noting that the seasonal trading results will become clearer over the next three to four weeks.
Under the new covenants Pumpkin Patch has to meet a guaranteeing group coverage ratio, and remain within 20 per cent of forecast earnings before interest, tax, depreciation and amortisation on a rolling 12-month basis. The retailer also told the bank it doesn’t intend on paying a dividend in the 2015 financial year, and will have to get the lender’s permission if that position changes.