Bank bails out UK retail vendor

Struggling UK software group, Torex Retail was rumoured to have been granted a cash lifeline by its bank this week.

Various reports have said the Royal Bank of Scotland had increased the vendor’s banking facility by an amount in the region of £20-30 million for six months.

The deal is said to have been made after accountancy firm KPMG were called in to review Torex financial position after it issued a profit warning and suspended trading in its shares on 26 January.

The Serious Fraud Office, Financial Services Authority and London Stock Exchange have all got involved in investigating a £23-million debt the company claimed is due to delays in delivering a number of point-of-sales contracts announced with retail customers.

Torex said £23.1 million of contracts would be delayed into its next financial year, ending 31 December 2007. These include a £10-million deal with McDonald’s, £1.2 million with pub group Spirit and £800,000 with clothing retailer Matalan.

The company is highly acquisitive, acting as a driving force for consolidation in the retail IT market by buying no less than 13 other vendors in the last four years, including XN Checkout Anker and Retail-J. The company is also being investigated for accounting irregularities associated with some of these buys.

Neither RBS nor Torex had any comment.