The dire financial climate has ensured that Charterhouse Communications, the financial publisher of such titles as What Mortgage? and What Investment?, ended the year to May with post-tax losses of £9.3 million and net debts of £7.4 million. The group says it may breach its new banking covenants and is dependent on its banks' support for survival. Leslie Copeland reports.

According to chairman Brian Rowbotham, Charterhouse suffered from the fallout from 11 September, the worldwide stock market decline, the general economic malaise, and a consequent collapse in investor confidence. These events, as well as the much publicised problems in the insurance, unit trust, investment trust and pension industries, ensured the contribution made by its personal finance publications was reduced dramatically. In total, sales fell 15 per cent to £12.9 million.

During the period the company ceased promoting its Successful Personal Investing home-study course, the operating arm of Independent Research Services, a business it bought a few years back for £8.4 million. The value of this business has now been completely written off. When the re-evaluation of certain publishing interests was complete, the goodwill amortisation charge amounted to £7.8 million.

The only bright spark amid the gloom was the fact that cashflow from Charterhouse's activities was positive throughout the period, at £499,000.

As for the next year, Rowbotham says the group will continue to control costs very tightly. However, he admits 'the uncertainty inherent in predicting future trading' means the company 'may breach one or more of its new bank covenants, and the ability of the group to continue to trade is dependent upon the bank's willingness to maintain its support in such circumstances'.

The shares fell to a new low of 0.75p on the news – their lowest level in the company's six-year history.