Troubled Findel kick-starts three-year turnaround plan

The home shopping group, which secured an £80.5m refinancing in March to stem its spiralling debts, said relationships had been jeopardised over the past year due to its financial difficulties.

However, group chief executive Roger Siddle said one of its credit insurers had already restored terms to “pre-crisis levels” after the refinancing, which enabled Findel to pay its major suppliers.

Findel is in discussions with other insurers to do the same.

The retailer’s stock levels diminished over the past year as its credit terms were significantly reduced or withdrawn. Sales dropped 2.6% to £532.6m for the year end April 1.

Pre-tax profit before exceptional items were deducted slumped from £11.7m to £7m. However, the group made a £1.4m pre-tax loss for the year when exceptional items and closed operations, including wedding etailer Confetti, were considered.

Findel reduced net debt from £309.6m to £227.8m over the year.

The group is also working to improve its buying function in hamper business Express Gifts, which accounts for 62%of its sales. It plans to secure better terms and intends to reduce its supplier numbers. It is looking to appoint a buying director to oversee the changes.

The group, which includes catalogue Kleeneze and sportswear etailer Kitbag, also aims to win back buyers hit by stock shortages.

Siddle said: “I can’t say that no damage has been done, but response rates are up this year. So far the evidence would show that the damage is not irreparable.”

He added that the results were “a remarkably resilient performance”.

Siddle said the new funds, of which £40m has been used to clear debt and £35m is being invested in improvements such as system upgrades, gives “a strong platform to drive results”. He expects the turnaround to take three years.

Findel chairman David Sugden said: “The board is pleased with progress to date with all major initiatives on track. The current year has started well and the group is trading in line with expectations.”

Broker Seymour Pierce upgraded its recommendation from sell to hold. Analyst Freddie George said: “The company appears on track with the restructuring. Encouragingly, the underlying business has been profitable throughout the last three years of instability.”