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Troubled music and DVD retailer HMV has issued its third profits warning this year, but said it had gained an extension from its bankers for tests on loan conditions.
It said it expected full-year pre-tax profits to be around £30m, compared with an estimate of £38m one month ago.
However, it said lending tests would kick in on 2 July rather than 30 April.
Banking facilities remained fully available and lenders continued to be supportive, it added.
The group said that trading conditions had remained “difficult” since its last profits warning on 1 March.
Talks with lenders concerning changes to its loan facilities were ongoing, it added.
Shares in the group fell by 6.5% to 14.5 pence following the statement. They have now plunged about 80% in the past 12 months.
Banks set specific conditions on loans, for example the amount of capital a company holds to secure them, and they will test these conditions at regular intervals.
“You probably don’t need telling that 2011 is shaping up into the worst period for retailers since the onset of the 2008-9 Great Recession, when Woolworths and Zavvi went kaput.”
Last month, HMV said it expected to fail the tests set by its lenders if they took place in April.
At the end of March, HMV said it was exploring options to sell its Waterstone’s bookstores, but said no discussions about a sale were taking place.
Founder Tim Waterstone, together with Russian billionaire Alexander Mamut, is reportedly looking at buying back the chain.
HMV is closing 60 stores this year as a result of falling sales.
The company has faced fierce competition from online retailers such as Amazon and iTunes.
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