HMV warns on covenant breach

High street retailer HMV this morning warned that it was likely it would breach its covenants at the end of January, due to difficult trading conditions.

"Current market trading conditions result in material uncertainties facing the business," the entertainment retailer said in its interim results statement this morning.

HMV said it was in "constructive discussions" with its banks to keep them informed of current trading.

Over the half year to October, total sales fell 13.5 per cent to £288.6m. Net debt over the period rose to £176.1m from £163.7m.