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Card Factory to receive one month covenant breaches waiver

The group stated it was pleased that its ‘banking syndicate’ had provided waivers and that it was taking into account the company's cash flow projections which were severely affected by Covid-19 and its impact on trade

Card Factory has been issued a one month extension to covenant breaches by banks until 28 February 2021.

Earlier this month, the firm warned it was going to breach its banking covenants by the end of January, although it had access to £200m of debt facilities.

The group stated it was pleased that its “banking syndicate” had provided waivers and that it was taking into account the company’s cash flow projections which were severely affected by Covid-19 and its impact on trade.

A released statement said: “We remain in constructive discussions with our banks, and have agreed a process to continue to explore a range of potential solutions, with scope for further extensions to the waivers as this process continues.”

The group had previously announced in its end of year trading update that revenue fell to £281.4m from £424.5m the previous year.

As a result of the drastically reduced footfall across all of its store locations, the company had warned that it will see a loss before tax of roughly £10m in its full-year results, should its stores remain closed until the end of January 2021.

Paul Moody, executive chairman at Card Factory, acknowledged that the firm “successfully pursued key strategic aims” throughout the year, despite deep investment being needed to become “Covid-secure”.

He said at the time: “Throughout 2020 we unwaveringly did all that was necessary to protect our colleagues and customers, making our stores one of the most Covid-secure shopping experiences available.”

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