Abbeycrest breaks profit covenants

JEWELLERY group Abbeycrest said it had breached its banking covenants, two weeks after warning a breach was possible.

The Leeds-based group said it has breached profit covenants with its senior lender, Burdale Financial Ltd, a subsidiary of the Bank of Ireland.

"The management is working closely with Burdale to reset these covenants," Abbeycrest said in a statement.

In December Abbeycrest issued a profits warning, saying falling prices and rising precious metal costs had dented margins.

Abbeycrest was established in 1979 by Michael Lever and Peter Rosenberg, and grew rapidly to become the UK's leading supplier of gold products to the jewellery trade. In 1985 it joined the Unlisted Securities Market, achieving a full listing in 1988.

In 1989 Abbeycrest moved into gemset jewellery with the acquisition of a Birmingham based manufacturer, Gallery Jewellers.

In January 2008 the group started the first phase of a business review and restructuring programme. Following that review, the group's activities have been restructured into a small number of strategic business units.