Postie Plus breaches bank deals

Clothing retailer Postie Plus Group has confirmed a $2.56 million loss for the six months to February 3, which it says was mainly due to a botched distribution centre outsourcing.

The loss made the company breach its banking covenants, but Postie Plus chairman Richard Punter said it was talking to its bankers and its financial position "remains stable".

The company reported its half-yearly performance to the NZX today. Its net loss compares to $920,000 loss for the six months to February 2012.

Punter said the company was "deeply disappointed" with the result, which stemmed from outsourcing the group's distribution systems to a purpose-built centre at Auckland Airport halfway through last year.

Early this month Postie announced the recovery from the bungled changeover was much slower than anticipated, making its share price plunge by a quarter to 18 cents. It since fell further to 14.5c, but today rose slightly on its announcement and was trading at 16c.

Punter said the company's position was stable despite the poor performance, with total assets of $37.95m and liabilities of $22.37m. Its inventory was valued at $23.3m.

The company's cash and equivalents was $43,000, with $3.18m in trade and receivables.

It owed $7.1m of accounts payable and had long-term borrowings of $13.75m.

Meanwhile, the company was both seeking compensation from the distribution centre supplier and working with it to improve the logistics. It has also enlisted consultants to help it through the difficulties.

The company expects to make a loss for the full year to August.