Profits decline as George Osborne’s family company violates conditions of Covid loan.

Fabric and wallpaper company Osborne & Little experienced higher costs and poor sales in the UK and Europe in the previous financial year.

Profits at the company, which is owned by former chancellor George Osborne’s family, plummeted by 98% to £30,000. The company also breached the terms of a Covid business loan due to increased costs and poor sales in the UK and Europe.

Sales for the upmarket fabric and wallpaper supplier, founded by Osborne’s father and brother-in-law in the 1960s, increased by 11% to £32m in the year ending on March 31. This growth was partly attributed to a deal with Ralph Lauren and strong sales in the US, but sales declined in the UK and Europe.

The subsequent six months proved to be challenging as well, with sales decreasing by 9% by the end of September 30.

In recently filed accounts at Companies House, Osborne & Little stated that the “unsettled situation in Europe” contributed to higher costs, including inflation, energy prices, and interest rate hikes. Additionally, demand was impacted by a slowdown in the property market. The company also mentioned that profits were negatively affected by significant supplier increases and the overall cost of living increase in all markets.

The company revealed that it had breached the terms of its government-backed coronavirus business interruption loan with HSBC in spring, with £742,000 still remaining to be repaid at the end of the financial year. This is the second breach in two years, leading to the need for renegotiations that include monthly liquidity tests starting from 2022.

The latest breach occurred when Osborne & Little’s operating activities fell below the agreed level after the company incurred losses. HSBC agreed not to take immediate action and revised the loan terms by removing current financial tests until March of this year. HSBC also lowered the minimum liquidity requirement for the company from £1.2m to £500,000.

Osborne & Little reported having £1.7m in debt from bank and government-backed loans, with just over £1m in cash at the end of the year. The company expressed confidence that it was still a going concern and would be able to meet its obligations as they become due. Shareholders did not receive any dividends, but the controlling shareholder, Sir Peter Osborne (George Osborne’s father), was repaid £140,000 of a £310,000 loan he provided to the business in April 2022.

Osborne & Little was contacted for comment.

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