1st Apr 2014 11:08
LONDON (Alliance News) - UK home shopping and education business Findel PLC said Tuesday that full-year group sales, its operating margin and pretax profit all rose in its last financial year, driven by its two largest businesses Express Gifts and Findel Education, but said its Kitbag business widened its losses.
In a post-close trading statement, Findel said that group sales for the full-year ended March 28, were 5% ahead of the prior year, boosted by a 4.7% increase in sales in the second-half of the year.
Findel said that its group pretax profit, before exceptional items for the year ended March 28, is expected to be in line with market expectations, between GBP22.0 million and GBP22.5 million.
It said its operating profit is substantially ahead of the previous year, and its group operating margin is expected to improve materially to around 6%, up from 4.6%.
Findel also gave a positive outlook for the year ahead, highlighting another improvement in its operating margin.
"The board maintains its expectations for the coming financial year including entering its 7% to 9% medium term operating margin range," the company said in a statement.
The group said that the improvement in its sales and earnings for the year, was driven by a strong performance from its education division Findel Education, and its direct mail-order business and largest segment Express Gifts.
Findel said its largest division Express Gifts, achieved strong sales growth in the year of 9.7% and a strong profit improvement.
Its Educations Supplies division also delivered strong sales growth of 6.2% for the year, and a significant increase in profit, although the division was hit slightly in the final weeks of the year, by uncertainty surrounding school buying patterns, the firm said.
"Nonetheless, significant progress has been made during the year, with the business continuing to demonstrate its competitive strengths by winning further local authority contracts," it said.
In contrast, the group said that trading within Kleeneze remained challenging during the year, with full-year sales having declined 5.4%.
"As a result, Kleeneze profit for the full-year is below the prior year and recent trading weakness also means it is behind our expectation," the company said.
The group said its Kitbag sports retail business also continued to underperform during the remainder of the year, after poor trading in the first-half, and will increase its losses for the year.
"For the full year, sales are 4.5% lower and the slower than expected turnaround of the business means that we have re-assessed the timeframe for delivering our overall trading targets for Kitbag," the firm said.
Findel said that its turnaround plans for the business, which include contract renegotiations and operational changes, together with the major events scheduled for the summer of 2014 such as the World Cup and the Ryder Cup, have shown signs of improvement, and as a result, is expecting an improvement in sales and smaller losses for Kitbag in the coming year, the company said.
Findel said its financial position improved significantly during the year, due to strong working capital controls, the sale of its healthcare division at the start of the year and the increase to its securitisation facility.
It said that it ended the year with net debt of GBP207 million, some GBP198 million below the previous year.
The group said that it will release its full-year results on June 4.
Findel shares were trading 1% lower Tuesday at 316.88 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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