27th Nov 2013 08:43
LONDON (Alliance News) - UK home shopping and education business Findel PLC Wednesday said that it narrowed its losses and increased revenue in the first half of the year, driven by a strong performance from its direct mail-order business and largest segment, Express Gifts.
Findel managed to increase sales and net assets, as well as reduce its losses and debt in the first half of the year, showing good progress since the company launched its turnaround plan three years ago.
Findel said it significantly narrowed its losses in the six months ended September 28, reporting a pretax loss of GBP3.0 million, compared to GBP11.9 million as year before, as it booked much smaller exceptional charges and finance costs.
The UK financial regulator recently told lenders to speed up and improve the way they are resolving repayments of missold payment protection insurance. As a result, Findel said it has set aside a further GBP2.0 million to cover the PPI complaints.
It said total exceptional items in the period were GBP2.8 million, including other restructuring costs, refinancing costs, some associated with the disposal of its healthcare division.
The group reported first half revenues of GBP243.6 million, up 5.2% from GBP231.7 million a year earlier.
"Express Gifts and Education, some 75% of Group revenues combined, are seeing improved momentum whilst Kitbag and Kleeneze still need to show progress," said Chief Executive Officer Roger Siddle in a statement.
Siddle said the business remains on track to hit its 7% to 9% operating margin targets in 2014/15.
Findel said that the start of the second half has shown continued momentum, with sales up 3.4% on the prior year in the eight weeks to November 22, boosted by strong growth from its Express Gifts and Education businesses.
It said that that its Education Supplies business continues to improve significantly over the prior year, while its direct mail-order business Express Gifts is well positioned and has started the peak Christmas trading period strongly.
Sales from Express Gifts rose 11% in the first half of the year, as Findel expanded its range and selection and saw increased customer numbers, while sales from its education supplies business increased 8.2%, as it benefited from a much improved customer proposition.
Findel said that sales from its household, beauty and health products marketing company Kleeneze continued to fall, but at a slower pace, as management decided to reduce its cost base and make greater use of the segments infrastructure and back-office processes.
The group said that sales from its sports leisurewear and football-kit retailer Kitbag were disappointing for the period, partly due to the absence of a major summer football championship. However, it said that the division maintained progress in winning new contracts, adding a deal for non-German sales of the kit of German sports club Borussia Dortmund.
Finel reduced its net debt by GBP15.4 million to GBP236.7 million, helped by the net proceeds from the sale of its healthcare division.
Findel shares were trading 1.6% higher Wednesday morning at 255.25 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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