Clinton Cards profits slump but banking facilities renegotiated until 2012

The greetings cards retailer’s adjusted operating profit slumped from £26.1m to £15.2m in the 26 weeks to February 1.

Adjusted operating profit at its Clinton brand declined from £25m to £17.9m, while its Birthday brand made a loss of £2.7m, compared with the £1.1m profit it made last year.

Group like-for-likes dropped 5.2 per cent in the period, but remained flat in the seven weeks to March 22.

Total group revenue for the 26 weeks was £243.3m, compared with £256.9m last year.

The retailer said the reduction was “the result of trading from 70 fewer stores combined with the prevailing conditions on the high street and resultant lower footfall”.

Like-for-likes at the Clinton brand slipped 5.8 per cent in the 26 week period, and fell 3 per cent at its Birthdays chain.

The company said the level of its revolving credit facilities remains unchanged at £72m, and that the “£60m working capital tranche will continue”. The company will be charged 15 per cent more interest this year.

It has agreed to repay the last scheduled amount of £12m over an extended period with to December 2011, as opposed to the original repayment date of November 2009.

Clinton Cards said margins were maintained and cost saving measures, including more efficient staffing and lower I.T costs, are expected to save the company £2m in the year to July 2009.

Chairman Don Lewin said: “The certainty afforded to us by the successful renewal of our banking facilities underlines the support we enjoy from our lending banks, despite the demanding conditions on the high street. However, as a result of the general economic climate, consumer confidence remains gloomy and trading conditions continue to be challenging.”