Findel confident in turnaround despite losses widening

The home shopping group said current trading was strong with sales up 2.9% for the eight weeks to November 25 on last year and its mail order business Express Gifts trading at 10.9% above last year.

For its half year to September 30, adjusted pre-tax loss widened from £3.1m to £5.6m. Revenue fell from £264m to £254.6m over the period.

The home shopping, education supplies and healthcare group recorded a fall in revenue of £254.6m for the 26 week period ending September 30, down from £264m last year.

The company improved its net debt to £256.9m from £336.8m last year and said it has stable financial platform in place following refinancing in March.

The group attributed the £5.6m pre-tax loss before exceptional items and terminated operations to the poor condition of the group entering the period, the “intrinsic seasonality” of its operations and “the need to rebuild in a challenging environment”.

Across the group, Express Gifts experienced a 4.9% increase due to an improved pricing policy, sports retailer Kitbag sales rose 15.3%, however, revenue at marketing firm Kleeneze fell 9.2% and Findel’s educations supplies division experienced a 9.6% fall during the period.

Findel chief executive Roger Siddle said: “The priority for 2011/12, the first year of the plan, has been to repair the damage resulting from an extended period of financial uncertainty. A material underinvestment in systems, strained supplier relationships and difficult stock management processes had left each of the five major operations in a weakened condition and inhibited recovery.

“The full potential plan is a three year turnaround and not all of these challenges can be fixed in a short time frame. We have, however, made good progress in the first six months.

Siddle said the group has made immediate use of the new funding to release pressure in its supply chain to good effect and has been pleased to see the gradual restoration of credit insurance to the group.

He added: “We have made early progress against the operational improvements set out for each business and have reinforced the management teams across the group.

“We remain confident that the investments and improvements we are making, underpinned by a stable financial platform, will deliver improved shareholder returns over the medium term.”