GRS Pubs bullish despite banking covenant breaches
The auditor’s report in its latest accounts, dated 31 August, said: “The company is currently in breach of the covenants on its £33,187,000 loan facility and therefore it is repayable on demand.”
It says that, while directors are confident a restructure plan will progress as intended, success depends on support of its lender Anglo Irish. “There can be no guarantee that this will continue.”
Therefore there’s “material uncertainty, which may cast significant doubt about the company’s ability to continue as a going concern”.
The accounts say cashflow forecasts indicate the company will generate sufficient cash to support operations and cover interest obligations to the end of 2013.
Boss Ted Kennedy told M&C Report it was a “technical breach” deriving from the fact its parent company, London Town PLC, is in administration. “It has no impact on the day-to-day running of the company.”
GRS Pubs reported a sharp fall in pre-tax profit from £5m to £392,000 in the year to 25 December 2011. Operating profit fell from £6.7m to £1.9m. Kennedy said the figures were hit by inter-company payments in the previous year.
Gross profit fell from £1.9m to £1.7m. Turnover fell 15% to £3m, which Kennedy said reflects its exit from temporary management.
