Childcare Retailer Mothercare Turns to KPMG for Refinancing Assistance
- Mothercare appoints KPMG for refinancing
- 76% drop in share price since start of the year
- Underlying pre-tax profits at lower end of £1-5m range
- £50m facility to £62.5m revolving credit facility
- £5m overdraft maturing in November
Childcare retailer Mothercare has appointed accountants KPMG to handle its refinancing in a bid to avoid collapse. The company, which operates 152 UK stores and 1,131 worldwide, has seen its share price plummet by 76% this year following two profit warnings. In a recent statement, Mothercare revealed it expects underlying pre-tax profits to be at the lower end of the £1-5m range previously guided. Last summer, the company refinanced after discussions with banking lenders HSBC and Barclays, converting its £50m facility into a £62.5m revolving credit facility, with a £5m overdraft maturing in November. A spokesperson for Mothercare said, ‘We are also exploring additional sources of financing to support and maintain the momentum of our transformation programme. All of these discussions are ongoing.’
Factuality Level: 8
Factuality Justification: The article provides accurate information about Mothercare’s financial situation, its appointment of KPMG for refinancing, and the company’s current challenges. It also includes relevant details about its share price performance and discussions with lenders HSBC and Barclays. The information is presented in a clear and concise manner without any apparent bias or misleading statements.
Noise Level: 3
Noise Justification: The article provides relevant information about Mothercare’s financial situation and its efforts to refinance with KPMG’s help, but it lacks in-depth analysis or exploration of the underlying causes and potential consequences of the company’s struggles. It also does not offer any actionable insights or solutions for readers.
Financial Relevance: Yes
Financial Markets Impacted: Mothercare, HSBC, Barclays
Financial Rating Justification: The article discusses Mothercare’s financial situation and its refinancing efforts with banking lenders HSBC and Barclays, which impacts the companies involved and potentially the retail sector.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the text, and the situation with Mothercare seems to be a financial crisis but it’s not severe enough to be rated higher than Minor.
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