It was announced in late November Pumpkin Patch risked breaching its banking covenants, and chairman Peter Schuyt said yesterday those same ''financial risks'' remained.
A restructuring in late 2012 included the closure of 40 United Kingdom and 20 United States operations at a cost of $37 million, which turned what should have been a $10 million full-year profit into a $27.5 million loss.
Pumpkin Patch's half year to January result saw a 2.2% rise in revenue to $121.9 million and after-tax profit up 10.7% to $1.5 million, but current restructuring costs of $1.1 million dragged the profit down to $700,000.
There was $2.6 million in sales growth, with comparable store growth up 5.7% in Australia, 1.8% in New Zealand and online sales grew 10.7%, while negative foreign exchange effects cost $7.6 million.
Mr Schuyt said that since announcing to shareholders last year a capital review was under way, ''certain third parties'' had ''proactively'' indicated an interest in Pumpkin Patch.
''The board believes it is in the company's interests to seek formal proposals in respect of either an acquisition of the company or in respects of recapitalisation,'' Mr Schuyt said.
''Market conditions are expected to remain challenging, currency headwinds are likely to intensify in the short term at least, and therefore the financial risks communicated at the last annual meeting remain,'' he said.
Chief executive Di Humphries said while it was ''still early days'' in restructuring, results so far had the business ''heading in the right direction'' and marketing initiatives were now more relevant to customers.
The company's predicament came to a head in late November, when it warned that if Christmas trading did not match expectations, it was at risk of breaching its banking covenants.
In October, Pumpkin Patch's annual accounts were tagged by auditors Pricewaterhouse- Coopers, who said there was ''uncertainty that may cast doubt'' about the company's ability to continue as a going concern.
Bank debt last July was up 34%, from $48.3 million to $64.9 million, but during the past six months it had been pared back to $52.7 million.
Craigs Investment Partners broker Peter McIntyre said there was ''a distinct possibility'' Pumpkin Patch's result could have been a lot worse.
''Some investors may have expected blood on the floor, but they've managed as best they can,'' he said of the financial result.
He noted a 42% share price revival, likely on the news Goldman Sachs had been contracted to advise about a purchase, where a ''one off'' sale would be seen as a positive.
Forsyth Barr broker Suzanne Kinnaird said the company's's debt levels remained high, at $52.7 million, and only ''modestly'' below the previous year.
''Inventory is also modestly ahead of last year, at $70.5 million ... its management remains an area of weakness in the business model,'' she said.
For the year to July 2012 Pumpkin Patch posted a $27.5 million loss, which included restructuring costs of $37.6 million, but for 2013 recorded an after-tax profit of $5.1 million. For the year to July 2014 it posted a $10.1 million loss.
Mr Schuyt said the transformation programme included ''right sizing'' the retail network, mainly in Australia with nine stores to close later this year, a redesign of the supply chain, and improvements to inventory management.
