Auditor Ernst & Young has voiced doubts over the ability of off-licence chain Threshers to continue as a going concern as it responded to parent company First Quench’s annual report.
The auditor cites “the existence of a material uncertainty” as the reason for its view, adding to the bleak outlook given by First Quench management in which the statement is made that “trading will be difficult for a period of time.”
Private equity backed First Quench Retailing reported sales of £652.3m, racking up a £30m loss for the year to June 28 2008.
A spokesman said: “These results are for the year ended 28 June 2008. At that stage, FQR was only 6 months into its turnaround plan. A major restructure of the business is still underway and senior management have put in place a transformation programme to address the key operational and commercial challenges facing the business and build a sustainable busines model.”
Like-for-like sales over Chirstmas were down 3.5 per cent, but have improved during the course of 2009 and the company’s same-store sales are currently 2.7 per cent behind last year. To date, First Quench has exited 162 loss-making stores and now has around 1400 off-licenses with Threshers accounting for 470 of the total.