Net debt and interest also increased, but financial director says it’s EBITDA that matters
Giles’s group pre-tax losses worsened 5% to £39.5m last year as the debt burden continued to escalate, accounts released today show.
Pre-tax losses increased from £37.5m to £39.5m during the 12 months to 31 August 2012. Meanwhile, net debt rose from £241.7m to £245.5m, and interest charges crept up from £33.4m to £35.1m.
Earlier this month chief executive Brendan McManus (pictured) said the company had produced a “strong performance”, with turnover growing to £88.7m (2011: £81.4m) and EBITDA increasing 0.7% to £24.7m (2011: £24m).
However, McManus did not comment on the company’s debt situation, which is detailed in the filed accounts called Expectrum Ltd, the name of the holding company.
Net debt increased from £241.7m to £245.5m, and interest charges increased from £33.4m to £35.1m during the year.
Giles owed a total of £142m in eurobonds and loan notes to private equity house Charterhouse, with the remainder bank debt.
The group accounts reveal that Giles is accruing interest of 12% and 15% on eurobonds to private equity house Charterhouse, which owns a two-thirds stake in the business. The eurobonds are repayable by March 2018.
Finance director Paul Matson said the company only needed to concern itself with paying interest on the senior bank debt, which it has held since 2008.
“There’s a notional amount of interest that rolls up. We don’t pay that and we will never pay that until the company is sold,”
Charterhouse will recoup its loans to Giles when it sells its stake in the broker.
As reported by Insurance Times, Charterhouse has appointed Credit Suisse to carry out a strategic review of the business with a view to a sale.
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