UK: Cosentino issues downbeat update
Cosentino Signature Wines has issued a downbeat trading update with warnings on low wholesale sales and rising debts.
The Californian wine producer, based in Napa Valley, said sales among US wholesalers had been "lower than anticipated" since 26 September.
The company, listed on London's Alternative Investment Market, warned yesterday (21 November) that the "strong" performance of the Cosentino Brand would fail to offset weakness at the wholesale level.
"Despite the strong retail performance, the disappointing performance of the wholesale division is expected to limit 2006 group revenue to approximately US$8m and EBITDA before exceptional costs to approximately US$800,000," Cosentino said.
Debt had risen to around US$22.5m, Cosentino said, and was expected to rise by a further US$1m over the next two months.
Cosentino has yet to agree on new credit facilities for next year and two board members have agreed to loan the company US$1m while talks on refinancing continue.
To raise cash and stem the rising debts, Cosentino has decided to put a hold on acquisitions and is seeking offers for "certain non-core assets".
Additionally, Cosentino CEO Keith Smith has taken on the additional role of chairman while the company seeks a new chief executive.
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