Balance Sheet Restructuring

11 February 2011

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA, SWITZERLAND, THE UNITED STATES OR ANY OTHER JURISDICTION OUTSIDE THE UNITED KINGDOM WHERE THE DISTRIBUTION OF SUCH MATERIALS MAY LEAD TO A BREACH OF ANY RELEVANT LEGAL OR REGULATORY REQUIREMENT

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS AND INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY NEW ORDINARY SHARES OR PLACING SHARES, AS REFERRED TO IN THIS ANNOUNCEMENT, EXCEPT ON THE BASIS OF INFORMATION IN THE PROSPECTUS TO BE PUBLISHED BY THE COMPANY IN DUE COURSE. COPIES OF THE PROSPECTUS WILL BE AVAILABLE FROM FINDEL PLC'S WEBSITE AND HAVE BEEN FORWARDED TO THE NATIONAL STORAGE MECHANSIM OPERATED BY MORNINGSTAR PLC

Findel plc ("Findel" or the "Company")

Announcement of balance sheet restructuring (the "Restructuring")

Findel, a multi-channel retailer with market-leading businesses in the home shopping, education supplies and healthcare markets, today announces a Restructuring of its balance sheet. This is to be undertaken by way of a Rights Issue and Placing, to raise gross proceeds of approximately £80.5 million, and by entering into New Lending Facilities.

Key highlights of the transaction

§ Restructuring of the Group's balance sheet, with significantly reduced debt and new funding to realise the operational improvements identified by the Full Potential Review

§ Rights Issue and Placing to raise approximately £80.5 million, fully committed either by irrevocable undertakings or underwriting

§ New Lending Facilities, with a five year term, a 3 per cent. margin and resulting in increased operational flexibility

§ Overall reduction in net debt, net of associated equity issue and debt restructuring costs, of approximately £110.5 million

Overview of the Rights Issue and Placing

1,223,605,440 New Ordinary Shares will be issued by way of a 5 for 2 Rights Issue at the Issue Price of 6.54 pence per New Ordinary Share, raising gross proceeds of £80 million (£75 million net of estimated equity issuance costs). The Issue Price represents a discount of 23.3 per cent. to the theoretical ex-rights price and a discount of 51.6 per cent. to the Closing Price of 13.50 pence per Ordinary Share on 10 February 2011 (being the last Business Day before today's announcement).

Schroder and Toscafund, Findel's two largest shareholders, have irrevocably undertaken to take up rights representing 34.8 per cent. of the Rights Issue in aggregate and to vote (to the extent that they have authority to do so) in favour of the necessary resolutions proposed at the General Meeting. The balance of the Rights Issue has been fully underwritten by J.P. Morgan Securities Ltd.

The Group is also carrying out the Placing in conjunction with the Rights Issue to facilitate investment in the Company by certain of its Directors. Roger Siddle, the Chief Executive will be investing £400,000 and certain other Board members will together be investing £95,000 in the Group through their participation in the Placing. In total, 5,803,048 Placing Shares will be issued at the Placing Price of 8.53 pence per Placing Share, raising proceeds of approximately £0.5 million. The Placing Price is set at the theoretical ex-rights price, which is the theoretical price of the Ordinary Shares taking into account the impact of the Rights Issue. The Placing Price represents a discount of 36.8 per cent. to the Closing Price of 13.50 pence per Ordinary Share on 10 February 2011 (being the last Business Day before today's announcement). The Directors of the Company who are also Shareholders have also indicated their intention to take up their rights to New Ordinary Shares under the Rights Issue in full.

The Rights Issue and Placing are conditional upon certain resolutions being passed at a general meeting of Findel's shareholders to be held on 28 February 2011 at 11.00 a.m. at the offices of Clifford Chance LLP, 10 Upper Bank Street, London E14 5JJ.

Overview of the New Lending Facilities

Conditional upon the completion of the Rights Issue, New Lending Facilities will be implemented by way of amendment and restatement of the Company's Existing Lending Facilities. The New Lending Facilities comprise five year commitments for:

§ £196.8 million New Revolving Credit Facilities; and

§ £105 million New Securitisation Facility.

£40 million of the net proceeds from the Rights Issue will be used to pre-pay indebtedness and cancel availability under Findel's Existing Revolving Credit Facilities. The New Lending Facilities will have a five year term to March 2016, a 3 per cent. margin and increased operational flexibility. A significant proportion of the interest costs associated with the New Revolving Credit Facility have been hedged by the Group.

In addition, £40 million of indebtedness under the Existing Revolving Credit Facilities will be released (and corresponding commitments of the Lenders cancelled) in consideration for the allotment and issue of 166,878,704 Convertible Shares to the Group's Lenders. The Convertible Shares may be converted into Ordinary Shares at the option of the holders of the Convertible Shares in the event that: (i) the Company's volume weighted average Ordinary Share price rises above 23.97 pence for a period of one month between the 2nd and 10th anniversary of the date of issue of the Convertible Shares; or (ii) in the event that an Offer becomes wholly unconditional (regardless of the share price performance of the Company). The rights and restrictions attaching to the Convertible Shares will be set out in the Proposed Articles of Association, including a prohibition on the Company making, paying or declaring dividends or other distributions in excess of 50 per cent., in aggregate, of the Group's net income in respect of any particular financial year. Dividends and other distributions are not permitted under the terms of the New Lending Facilities.

Taken together with the net proceeds of the Rights Issue and the Placing, and net of associated equity issuance and debt restructuring costs, Group net debt will reduce by approximately £110.5 million as a result of the Restructuring. The Existing Securitisation Facility will also be extended to March 2016 to be coterminous with the New Revolving Credit Facilities.

Current trading and prospects

The Group today announces its Interim Management Statement covering the period from 1 October 2010 to today. Specific numerical references in the statement relate to the 17 week period ending 28th January 2011 unless otherwise referenced.

Overall sales for the Group on a continuing basis were slightly behind the equivalent period in the prior financial year, with adverse weather conditions impacting a number of businesses in the Group.

The overall performance of our Home Shopping businesses has remained in line with the trends seen during the first half of the year, and in aggregate sales were 1.7 per cent. below the prior year for the period. Customer numbers at Express Gifts for the calendar year finished marginally ahead of our expectations at 1.1 million. The impact of poor weather conditions was relatively limited within Express Gifts during the Christmas period, but we have now seen an effect on sales caused by a backlog of catalogue deliveries within the Royal Mail network during early January 2011. Express Gifts' sales for the period were 4.3 per cent. behind prior year, with a large part of the shortfall occurring in January. Kitbag had a record December, with sales being almost 25 per cent. higher than the prior year in the month and up 18 per cent. in total for the last 17 weeks. Kleeneze's sales in December, however, were impacted by poor weather conditions affecting the ability of distributors to reach their customers, and were 9 per cent. below the prior year in the period.

The Education Supplies Division was heavily impacted by snow conditions, with up to 25 per cent. of schools closed for a fortnight in December 2010 which affected orders significantly during the month. Sales for the last 17 weeks were down 11 per cent. compared to the prior year. The overall profit impact of this sales decline, however, was mitigated by the fact that December is traditionally one of the lower order volume months of the year, given term ends and the forthcoming holiday period. The Healthcare Division has continued to trade slightly ahead of the prior year.

In the short term the Group's business continues to face a number of challenges, both in maintaining supply chain effectiveness given current financial constraints and the more general external economic environment. However, the proposed financial restructuring announced today will provide the Group with the secure funding base and capital availability required to implement our Full Potential Review programme and should give confidence to all stakeholders. The Board believes that successful delivery of this programme will produce substantial benefits for all stakeholders in the longer-term.

Other

A combined prospectus and circular containing details of the Rights Issue and the Placing, the terms of the New Lending Facilities and convening a general meeting to approve certain matters necessary to implement the proposed Rights Issue and Placing, is expected to be posted to Qualifying Shareholders shortly and will be made available on the Group's website, www.findel.co.uk.

Greenhill & Co. International LLP is acting as financial adviser and joint sponsor to Findel. J.P. Morgan Securities Ltd. (which conducts its UK investment banking business under the name J.P. Morgan Cazenove) is acting as joint sponsor and joint broker to Findel and bookrunner with respect to the Rights Issue and Placing. Evolution Securities Limited is acting as joint broker to Findel with respect to the Rights Issue.

Commenting on the Restructuring, David Sugden, Chairman of Findel said:

"The Restructuring announced today will significantly strengthen the Group's financial position and provide funding for implementation of the initiatives identified by the Full Potential Review. Following completion of this Restructuring, Findel's new management team, clear operational strategy and stronger capital base leave the Group well positioned to deliver value for shareholders and strengthen its market position."

- Ends -

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This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of or issue, or any solicitation of an offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for any security of the capital of the Group in any jurisdiction. This announcement is not an advertisement and does not constitute a prospectus. Nothing in this announcement should be interpreted as a term or condition of the Rights Issue or the Placing. Any purchase of or application for New Ordinary Shares or Placing Shares under or in connection with the Rights Issue or the Placing should only be made on the basis of information contained in the prospectus comprising a circular to shareholders of Findel to be published in connection with the Rights Issue and Placing (the "Prospectus") and any supplement thereto.

The distribution of this announcement and the Rights Issue and Placing may be restricted by law in certain jurisdictions. Persons to whose attention this announcement comes are required to inform themselves about and to observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement and the information contained herein are not for release, publication or distribution in or into Canada, Japan, New Zealand, South Africa, Switzerland, the United States or any other jurisdiction outside the United Kingdom where the distribution of such materials may lead to a breach of any relevant legal or regulatory requirement.

This announcement (including the terms and conditions set out herein) does not constitute an offer of securities for sale in the United States or any of the other Restricted Jurisdiction and none of the New Ordinary Shares or the Placing Shares have been or will be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or under the securities laws of any state of the United States or any of the Restricted Jurisdictions. Neither the New Ordinary Shares nor the Placing Shares may be offered, sold, resold or delivered, directly or indirectly, in or into the United States except pursuant to an effective registration statement under the Securities Act or pursuant to a valid exemption from registration or to any national, resident or citizen of any other Restricted Jurisdiction.

Neither the New Ordinary Shares nor the Placing Shares have been approved or disapproved by the United States Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offer of the New Ordinary Shares or the accuracy or adequacy of the Prospectus or this announcement. Any representation to the contrary is a criminal offence in the United States.

Greenhill & Co. International LLP ("Greenhill"), which is authorised and regulated by the Financial Services Authority, is acting exclusively for the Company and for no-one else and will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for providing any advice in relation to the Rights Issue and Placing, or the contents of this announcement or any transaction, arrangement or matter referred to herein.

J.P. Morgan Securities Ltd. (which conducts its UK investment banking business under the name J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), which is authorised and regulated by the Financial Services Authority, is acting exclusively for the Company and for no-one else and will not be responsible to anyone other than the Company for providing the protection afforded to its clients nor for providing any advice in relation to the Rights Issue and Placing, or the contents of this announcement or any transaction, arrangement or matter referred to herein.

Evolution Securities Limited ("Evolution"), which is authorised and regulated by the Financial Services Authority, is acting exclusively for the Company and for no-one else and will not be responsible to anyone other than the Company for providing the protection afforded to its clients nor for providing any advice in relation to the Rights Issue and Placing, or the contents of this announcement or any transaction, arrangement or matter referred to herein.

No statement in this announcement is intended as a profit forecast or a profit estimate and no statement in this announcement should be interpreted to mean that earnings per share for the current or future financial years would necessarily match or exceed the historical published earnings per share.

Certain statements in this announcement are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties and assumptions because they relate to events and/or depend on circumstances that may or may not occur in the future and could cause actual results to differ materially from those expressed in, or implied by, the forward looking statements. Forward looking statements contained in this announcement based on past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Subject to any requirement under the Listing Rules of the Financial Services Authority, none of the Company, Greenhill, J.P. Morgan Cazenove or Evolution undertakes any obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward looking statements, which speak only as of the date of this announcement.

This announcement has been issued by Findel plc and is the sole responsibility of Findel plc.

Not for release, publicationor distribution in or into Canada, Japan, New Zealand, South Africa, Switzerland or the United States

Findel plc ("Findel" or the "Company")

Announcement of comprehensive balance sheet restructuring (the "Restructuring")

Introduction

Findel announces today that it proposes to raise approximately £80.5 million (approximately £75.5 million net of expenses) through a Rights Issue of 1,223,605,440 New Ordinary Shares and a Placing of 5,803,048 Placing Shares.

The Rights Issue will raise approximately £80.0 million (approximately £75.0 million net of expenses) and is being made to Qualifying Shareholders who held Existing Ordinary Shares on the Record Date on the basis of 5 New Ordinary Shares for every 2 Existing Ordinary Shares at 6.54 pence per New Ordinary Share.

The Issue Price represents a 23.3 per cent. discount to the theoretical ex-rights price and a 51.6 per cent. discount to the Closing Price of 13.50 pence per Ordinary Share on 10 February 2011 (being the last Business Day before today's announcement).

The Placing will raise approximately £0.5 million and is conditional on the Rights Issue becoming effective. The Placing is being carried out in addition to the Rights Issue in order to allow David Sugden, Roger Siddle, Laurel Powers-Freeling and Eric Tracey, each a Director of the Company, to show their continuing support for the Company by participating in this capital raising in excess of their Rights Issue entitlement (if any). The Placing Price has been set at the theoretical ex-rights price based on the Closing Price of 13.50 pence per Ordinary Share on 10 February 2011 (being the last Business Day before today's announcement) - this is the theoretical price of the Ordinary Shares taking into account the impact of the Rights Issue. The Directors of the Company who are also Shareholders have indicated their intention to take up their rights to New Ordinary Shares under the Rights Issue in full.

Schroder and Toscafund, the Group's two largest shareholders, have irrevocably undertaken to vote in favour of the necessary resolutions and to take-up rights under the Rights Issue in respect of some of the Existing Ordinary Shares which they own or manage. The balance of the Rights Issue has been underwritten by J.P. Morgan Securities Ltd. pursuant to and on the terms of the Underwriting Agreement.

The Rights Issue and Placing are conditional on the passing by Shareholders of certain Resolutions at a General Meeting being convened at 11.00 a.m. on 28 February 2011.

Background to and reasons for the Rights Issue and Placing

Findel has faced considerable challenges in recent years and its business has suffered from reduced profitability. This has stemmed from a combination of the effects of the Group's previous acquisition-led strategy, difficult trading conditions, the effect of introducing more prudent accounting policies in 2009 and accounting irregularities in the Education Supplies Division. In light of these challenges the Board has undertaken a number of corrective actions, including a Group-wide Full Potential Review of the Group's businesses and operations over the last six months. This has identified several areas of opportunity to improve performance and the Board believes that each of the Group's businesses is capable of contributing to significantly improved performance. It is estimated that implementation of these operational improvements will require approximately £35 million of new funding.

In parallel with this, the Board has been examining ways to reduce debt and to put in place a stable financial platform to allow successful delivery of the Group's operational turnaround. Accordingly, the Board today announces a Rights Issue and Placing to raise gross proceeds of approximately £80.5 million (approximately £75.5 million net of expenses) which, together with the New Lending Facilities, will restructure the Group's balance sheet.

Use of proceeds

Of the net proceeds, £40 million will be used to pre-pay indebtedness and cancel availability under the Existing Revolving Credit Facilities, with a further £40 million of indebtedness being released (and corresponding commitments of the Lenders cancelled) in consideration of the allotment and issue of Convertible Shares to the Lenders. The proceeds of the Placing and the remaining balance of the proceeds of the Rights Issue will be retained by the Group, initially to reduce indebtedness and subsequently to fund the initiatives identified by the Full Potential Review. In particular, this will include investments in systems and processes in Express Gifts and the Education Supplies Division, and investments in working capital in Express Gifts and Kitbag.

Taking into account the approximately £75.5 million of net proceeds from the Rights Issue and the Placing, the £40 million of indebtedness being released in consideration of the allotment and issue of Convertible Shares to the Lenders and the costs associated with the wider restructuring of the Group's credit facilities of approximately £5 million, Group net indebtedness will reduce by approximately £110.5 million as a result of the Rights Issue and the Placing.

Details of the Rights Issue

The Rights Issue is being made to Qualifying Shareholders on the register of members of the Company at the close of business on 24 February 2011. Pursuant to the Rights Issue, the Company is proposing to offer up to 1,223,605,440 New Ordinary Shares by way of rights to Qualifying Shareholders at the Issue Price of 6.54 pence per New Ordinary Share payable in full on acceptance by no later than 15 March 2011. The Rights Issue is expected to raise approximately £80.0 million (approximately £75.0 million net of expenses). The Issue Price represents a discount of approximately 23.3 per cent. to the theoretical ex-rights price based on the Closing Price of 13.50 pence per Existing Ordinary Share on 10 February 2011, being the last Business Day before announcement of the Rights Issue and the Placing. The Rights Issue will be made on the basis of:

5 New Ordinary Shares for every 2 Existing Ordinary Shares

registered in the name of each Qualifying Shareholder at the close of business on the Record Date and so in proportion for any other number of Existing Ordinary Shares then registered in the name of such Qualifying Shareholder.

TAM and Schroder have each irrevocably undertaken to take up rights under the Rights Issue and to subscribe for the TAM Shares and Schroder Shares respectively.

Save in respect of the TAM Shares and the Schroder Shares, the Rights Issue is fully underwritten by J.P. Morgan Securities Ltd. pursuant to the Underwriting Agreement.

The Rights Issue is conditional upon:

§ the passing, without amendment, of Resolutions 1 to 4 (inclusive) at the General Meeting;

§ the Underwriting Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms; and

§ Admission becoming effective by not later than 8.00 a.m. on 1 March 2011 (or such later time and date as the parties to the Underwriting Agreement may agree, not being later than 14 March 2011).

The latest time and date for acceptance and payment in full under the Rights Issue is expected to be 11.00 a.m. on 15 March 2011.

Details of the Placing

The Company also intends to raise approximately £0.5 million by way of the Placing, through the issue of 5,803,048 Placing Shares to Placees, at a Placing Price of 8.53 pence per Placing Share. The Placing is being undertaken to facilitate investment in the Company by certain members of the Board.

The Placing Price has been set at the theoretical ex-rights price based on the Closing Price of 13.50 pence per Ordinary Share on 10 February 2011, being the last Business Day before announcement of the Rights Issue and the Placing. This price is the theoretical price of the Ordinary Shares taking into account the impact of the Rights Issue. This will represent a discount of 36.8 per cent. to the Closing Price of the Ordinary Shares on 10 February 2011, being the last Business Day before announcement of the Rights Issue and the Placing.

Each subscription for Placing Shares pursuant to the Placing is conditional upon:

§ the passing, without amendment, of Resolutions 1 to 6 (inclusive) at the General Meeting;

§ the Underwriting Agreement and the relevant Placing Letter having become unconditional in all respects (save for the conditions relating to Admission and Placing Admission) and not having been terminated in accordance with their terms; and

§ Placing Admission and Admission becoming effective by not later than 8.00 a.m. on 4 April 2011.

Details of the New Lending Facilities

The Group entered into conditional agreements for the provision of the New Lending Facilities on 11 February 2011, which will be implemented by way of amendment and restatement of the Existing Lending Facilities and which comprise five year commitments for:

§ the £196.8 million New Revolving Credit Facilities; and

§ the £105 million New Securitisation Facility.

The New Lending Facilities will only become available to the Group if the Rights Issue becomes effective. In such circumstances, the Existing Lending Facilities will be amended and £40 million of the proceeds of the Rights Issue will be used to pre-pay indebtedness and cancel availability under the Existing Revolving Credit Facilities. In addition, a further £40 million of indebtedness is being released in consideration of the allotment and issue of 166,878,704 Convertible Shares to the Lenders.

The Board believes that the New Revolving Credit Facilities offer significantly greater operational flexibility in terms of covenants and availability than the Group's Existing Revolving Credit Facilities.

In addition to the amendments to be made to the Existing Revolving Credit Facilities, the Existing Securitisation Facility will be amended to make it coterminous with the New Revolving Credit Facilities. The material terms of the New Securitisation Facility are otherwise the same as the Existing Securitisation Facility.

Circular and General Meeting

The prospectus, comprising a circular and containing details of the Rights Issue and Placing and the terms of the New Lending Facilities, is expected to be posted to Shareholders shortly. For the purposes of effecting, inter alia, the Rights Issue and the Placing, the Resolutions will be proposed at the General Meeting. At the end of the prospectus, Shareholders will find a notice convening a General Meeting of the Company, which is to be held at the offices of Clifford Chance LLP, 10 Upper Bank Street, London E14 5JJ. The full text of the Resolutions is set out in that notice.

Appendix 1: Expected Timetable of Principal Events

(a) Subject to certain restrictions relating to Shareholders with registered addresses outside the UK

Appendix 2: Definitions