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Tight margins at Kids Unlimited

publication date: Mar 2, 2008
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author/source: Ed Tranham
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It appears from recent filings at Companies House that Kids Unlimited (KU) has restructured its debt by substituting all or part of the £4m it owes to Bank of Scotland through the issuing of preference shares to KU’s majority shareholder, ISIS Equity Partners.

At the same time, KU’s latest set of filed accounts for the year ending 30 April 2007 continues to provide grim reading. Although sales increased by £3.75m to £27.37m, the 2007 EBITDA was up by only £613k to £931k and that’s before an exceptional charge of £350k. After depreciation, the exceptional charge and £800k of net interest payments (£457k to ISIS Equity Partners), a loss of £1.61m was reported. Over the same period, borrowings increased by £415k to £13.27m. £4m of this indebtness has now been repaid via the issue of preference shares. With debtors down, the overall balance sheet has worsened although this could look different if KU’s real estate is included at market value and the £8.9m shareholder loans treated as quasi equity.

Credit control seems to have been a problem at KU. Tucked away in the directors’ report is a note setting out KU’s new tougher regime for credit control to ensure monies are collected. Debt reports are now being run three times per month against every child!

We are sure that ISIS would exit KU if the price was right. But for the time being they will be requiring the directors to begin to squeeze out more margin from their 52 nurseries.

www.kidsunlimited.co.uk
www.isisep.com


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