Toy distributor Funtastic Ltd (FUN) has hit back at an article published in a newspaper today which claims the group has credit issues.
An article in today’s edition of Australian Financial Review said the wholesaler was “facing a credit crunch of its own, judging by the company’s latest annual reports.”
In response to the article, the Melbourne-based company said the comments were inaccurate.
“The directors confirm that there are no credit issues at Funtastic and the company confirms that it is trading within its existing banking facilities,” Funtastic said.
The troubled ABC Learning Centres holds a 19.9% interest in Funtastic, which has an exclusive deal to supply toys to ABC in Australia and overseas.
The AFR article raises the question of what will happen with this long-term exclusive deal taking into consideration that ABC is in discussions to sell 60% of its US business to Morgan Stanley Private Equity.
The question will lead FUN investors to ponder the repercussions from the fallout of ABC.
In its annual result released end of February, the group announced a 57% fall in net profit after tax of $5.2 million, from $12.1 million previously.
In the last 52 weeks, the price of FUN shares have lost over 80% in value, from a high of $2.02 in May 2007 to current trade of around 37 cents a share.
Today, FUN shares gained half a cent or 1.3% to close at 39 cents.
