Utopian Leisure breaches covenants as losses surge

The Newcastle-based group negotiated a new £7.92m loan in October 2009, subject to a series of covenants. “The group is not in compliance with these covenants, and as a result the total loan balance has been classified as falling due within one year,” the company said in its 2010 accounts, published at Companies House.

“The group’s bankers have continued to support the group by not demanding repayment of the bank loans and positive negotiations are continuing to renegotiate the terms of the loans. However, the directors have no commitment of continuing support from its bankers.”

Senior said: “I’m busy having conversations with the bank at the moment. They are quite supportive.”

Utopian’s losses for the year rose from £736,863 to £1.62m on turnover down 4.7% to £8.92m.

EBITDA was £120,000 (2009: £1.11m). Bank borrowings at the year-end were £8.41m (2009: £7.93m).

Operating profit of £100,551 in 2009 was turned into an operating loss of £759,887 for the firm, which also operates two food takeaways. Senior said the company lost between £320,000 and £340,000 due to the snow at the end of 2010.

“In November and December the snow made it all but impossible to get around. I think the north-east got the snow worse than some areas, it was badly affected.”