Jasons Travel Media, which announced the departures of its chief executive and a director in the past two months, is in talks with its banks after breaching lending covenants and forecasting an annual loss.
The Auckland-based company is bracing for a pretax loss in the year ending March 31, which will breach its interest cover and debt to earnings before interest, tax, depreciation and amortisation covenants, and has asked ANZ New Zealand for a waiver, it said in a statement.
As at September 30, Jasons had $2.3 million in borrowings falling due in the following 12 months, and $1.9 million in financial liabilities maturing beyond that timeframe. As a ratio to Jason's total equity, the company's gearing rose to 191 per cent as at September 30 from 108 per cent six months earlier.
"Jasons has tackled its balance sheet with rigour and paid down relatively large amounts of debt during a time of global economic uncertainty while at the same time implementing a number of changes designed to better serve its customers and meet client expectations," chairman John Sandford said. "We're focused on rebuilding the company's position as a profitable, successful company based on our position as a trusted source of travel information."
The company blamed Australian sales that were well behind budget as the main cause for the downturn, and will "significantly" scale back its operations across the Tasman, including job cuts. The New Zealand operation was slightly behind budget, though Jasons will have to account for non-cash adjustments in the period and increased accruals for bad debts on both sides of the Tasman.
