Beleaguered drinks group HP Bulmer's financial prospects brightened after banks agreed to fund the Strongbow maker for another year.

The Hereford-based company has also sanctioned a major overhaul of its business after tough trading conditions and one-off costs hit profits.

Bulmer has now pledged to focus its UK activities on the Strongbow and San Miguel brands and will look to refocus its international operation.

A new chief executive is also expected to be appointed soon to replace Mike Hughes, who resigned after the discovery of accounting problems.

In September, the emergence of £3.3 million of unidentified promotional costs prompted a restatement of accounts.

Profits after tax for the year to April 26 are now £1 million lower at £654,000. Much of the extra promotional cost has been treated as a prior year adjustment.

The renegotiation of banking facilities comes after Bulmer announced last month it had breached certain banking covenants.

Those talks have now ended, although the financing to November 2003 has been secured at a higher rate of interest.

As part of the agreement, dividend payments scheduled for January have been pulled.

Trading over the summer has been hurt by poor weather but Bulmer said UK sales in the first five months remained in line with last year - helped by market-beating growth from Strongbow.

However, Bulmer warned its international performance continued to struggle because of aggressive competition from beer and ready-to-drink products.

Any loss-making activities overseas will be disposed of or reorganised as a result of the review.