Warner continues talks with lenders

Its adjusted net asset value a share in its preliminary results for the year to the end of March 2009 was slashed to just 8p from 557p a year ago.

Fund and asset manager Warner said this morning it had adequate resources to continue operating for the foreseeable future but until talks with lenders Royal Bank of Scotland, Bank of Scotland and Barclays secure new facilities ‘uncertainty over the ability of the company and/or individual group companies to continue as a going concern must remain.’

It plans to extend and amend its current banking facilities in the case of two and to renew in the case of the third. The third facility is in effect being rolled on a periodic basis and the directors are confident that this will continue until renewal. In addition to the current facilities, Warner has asked its lenders for a working capital facility of between 1% and 2% of its total existing facilities.

Each lender has currently reserved its rights to formally request the testing of certain financial covenants as discussions continue. The directors would not expect the covenants to be met if tested.

Chairman Philip Warner said: ‘This has been a particularly difficult year for the group, possibly the worst in our 118 year history. The second half of our financial year saw the decline in property values accelerate rapidly, following the collapse of Lehman Brothers last September and the resultant considerable turmoil in financial markets. We were not immune and the speed and steepness of that decline were too great for us to restore our gearing to normal levels, despite making sales of £80m. As a result, the group's gross asset value is only just above its level of debt.

‘On a more positive note, the balance sheet does not include the full worth of our asset management business and our focus on income generation and cost cutting has produced a good relative asset management performance.’