Interim Management Statement

22 January 2014

Findel plc (the "Group")

INTERIM MANAGEMENT STATEMENT

Findel plc, a market leader in the UK home shopping and education supplies markets, today issues its Interim Management Statement covering the 16 weeks of the Group's second half from 28 September 2013 to 17 January 2014. This should be read in conjunction with the Group's Interim Results announcement issued on 27 November 2013 and the announcement on funding issued on 15 January 2014.

Group Performance

The Group's strong performance continues, with total sales since the half-year 3.8% ahead of the prior year, up from 3.4% in the 8 weeks to 22 November 2013*. In the financial year-to-date, Group sales are 4.6% ahead of the prior year with continued strong performance from our largest businesses, Express Gifts and Education. During the period we also reached agreement with our lenders around an increase in the securitised debt facility supporting the Express Gifts credit receivables portfolio, and separately with our pension scheme trustees with regard to fixing pension contributions over the next 10 years.

Overall, the Group remains well on track to deliver another year of strong profit growth and meet its stated 2014/15 operating margin target range.

Divisional Performance

Express Gifts, our largest business, has again achieved strong sales growth during a record Christmas trading period. Since the half-year sales have increased by 6.9% versus the prior year, with a significant improvement in product gross margins. This growth remains well balanced with improved retention and increased spend from existing customers and the addition of new customers. There has been an overall growth in the active customer number base of 8.3% at December 2013. The increase in the customer base provides a strong platform for continued growth going forwards. Bad debt indicators have remained stable since the half-year, with the new behavioural scoring system fully functional.

Within our Education Supplies division, during the division's seasonally quiet period we have continued to see evidence of recovery with sales growth since the half year of 3.4%. As noted in the interim report, there remains an element of uncertainty with regard to buying patterns in academies and schools remain cautious with budgets ahead of the new curriculum in 2014.

Although Kitbag is underperforming against our expectations, work continues on the turnaround programme and restructuring of unprofitable physical retail operations. Sales since the half-year were down 4.3% versus last year compared to the 11.0% decline reported at the end of November. There remains a strong pipeline, with the recent launch of online sales in Europe for the NHL (US National Hockey League).

Within Kleeneze, sales since the half year have declined by 5.0%. Work continues on broadening the offer and incentives for distributors to improve distributor retention and recruitment.

Financial position

The financial position of the Group continues to improve. As announced on 15 January, we have secured an increase in the Express Gifts' securitisation facility from £105m to £130m to support the ongoing growth of Express Gifts' business. There has been no change to the Group's revolving credit facilities ('core net debt') and this therefore represents an increase in the total borrowing facilities available to the Group. The increased scale of the securitisation facility will provide a more appropriate source of funds to support future growth in Express Gifts, and will allow the Group's core net debt to reduce at a faster rate.

The Group's total debt at the end of December 2013 was £224.3m, a decrease of £19.8m since December 2012, of which core net debt was £119.3m, also £19.8m lower than last year. Had the increase to the securitisation facility been in place at the end of December (which is a seasonal high-point for the receivables book), core net debt would have been £39.5m lower than last year at £99.6m, although total net debt would not have been affected further.

Net assets at the end of December 2013 stood at £120.7m (December 2012: £103.8m) meaning that the group's gearing ratio (total net debt to net assets) reduced from 2.4x to 1.9x.

The Group has recently reached agreement with the trustees of the Group's closed defined benefit pension scheme on the level of the Group's ongoing contributions following their triennial valuation as at April 2013. The average level of contributions for the next three years will be in line with the current level of c.£3m per annum.

Summary

The board remains pleased with the progress of the Group, both in terms of operating performance and capital structure. The continued improvements in performance from our two largest businesses, Express Gifts and Education Supplies, provide a strong underpinning of the Group's ongoing turnaround. The Group remains on track to deliver full year results in line with market expectations and achieve its medium term targets.

* the 8 week period since the commencement of the second half of the financial year from 28 September 2013 to22 November 2013, and which was commented upon in the Interim Results announcement on 27 November 2013

Enquiries

Findel plcRoger Siddle / Tim Kowalski0161 303 3465

Tulchan Communications LLPStephen Malthouse / Michelle Clarke020 7353 4200