Flying Brands downgrades expectations

In a trading update today, the group said several events will hinder its performance for the year to December 2007. It cited its launch in Australia, the Royal Mail strike, the poor weather and pressure in the CD and DVD markets.

The Royal Mail strike disruptions had a negative effect on demand for products, driven by delay in catalogues reaching customers and the postal service’s ability to deliver products for its Flying Flowers and Gardening Direct businesses.

Flying Brand’s launch in Australia led to more costs being incurred this year because the group shipped a larger number of additional starter packs to new customers than expected. The group expects this investment in its customer base to deliver stronger revenues and profits next year.

The poor weather in August affected gardening activity in the UK and an improved performance in September has not offset this negative impact.

The group has decided to write off investments in the Jersey-based internet company Mail Direct, which trades as taxfreeshopping.com and discontinue this joint venture, because of pressure in the CD and DVD markets.

Flying Brand’s chief executive Mark Dugdale said: “We have made every effort to advise our customers of the status of their orders and offer them, where appropriate, discounted courier-delivered alternatives.

“However, Flying Brands’ marketing proposition relies heavily on shipping live products in narrow delivery windows, hence the impact of even a short postal strike has had adverse consequences on the group.”