Troubled toy trains maker Hornby has struck a deal on Tuesday with its lender to prop up the finances as it continues to struggle with a dip in sales.
The company, which is in the middle of a turnaround plan under new chief executive Lyndon Davies, admitted that its decision to stop discounting goods and delays in delivering its products had continued to hit sales in 2018.
Barclays, its current lender, has agreed to support the company and waive its underlying profits covenant for the three months to March 31. The move comes as core earnings were affected by reduced sales volumes.
Davies said Hornby has made a lot of progress but warned that there is still much more to do in terms of reducing costs, streamlining processes and adding routes to market.
The retailer has a disappointing Christmas and recently had to warn on profits following various attempts to raise money to keep the business afloat. However, Hornby added that there has been an uptick in sales in recent weeks.
Shares were down 1.47p to 23.03p.