Findel boss expects group to return to profit this year as Kitbag recovers

• Retailer says £1.7m loss due to exceptionals
• Findel says Kitbag will return to profit
• Findel will not break up business further

The retailer reported a pre-tax loss of £1.7m for the year ending March 31, but Sugden attributed this to one-off exceptional items.

Sugden said: “There were two big drivers of the loss in the exceptional items, one was the write down from the Kleeneze business, and the second is the challenges in the educational business, we have written down the intangible assets of that business.

“So I would hope for the current year, the profits before tax and exceptionals will be much more able to shine through to the bottom line.”

Findel’s pre-tax profit before exceptionals rose 28% to £26.5m.

Sugden also believes its Kitbag business, which it recently decided to keep rather than sell-off, will return to profit this year.

He said: “If you take out an allocation of central costs they have a budget that gets them back into profit into 2016. The way the Kitbag management team is motivated, this is the year they are going to get back into the black.”

Review of business

Findel has finished a review of its business and has decided not to break up the group any further for at least the next three years.

Sugden said: “We have taken the opportunity to sit back and take a look at the shape of business as a whole.

“For all of the businesses we have a lot of do to maximise value for shareholders and because of that the group will be kept together in the medium term.”

Findel makes around 90% of operating profits from its Express Gifts retail business and has big plans for it this year.

Findel believes it can drive a lot more sales by expanding its clothing range. Clothing currently accounts for 23% of Express Gifts’ total sales and Findel believes clothing could eventually make up over half of sales.