Trading Statement

22 January 2015

Findel plc (the "Group")

TRADING UPDATE - CONTINUING PROGRESS, EXTENSION OF DEBT FACILITIES

Findel plc, a market leader in the UK home shopping and education supplies markets, today issues a trading statement covering the 16 weeks of the Group's second half from 27 September 2014 to 16 January 2015. This should be read in conjunction with the Group's Interim Results announcement issued on 26 November 2014 and the separate announcement regarding the future board change issued today.

Highlights

· Group sales in the 16 weeks since the half-year up 1.1%,

· Strong sales growth in the 8 week period since announcement of Interim Results; up 4.2% with growth driven by a continued strong performance from Express Gifts (product sales up by 11.3%)

· Significant reduction in net bank debt at December 2014 to £82.4m

· Bank and securitisation facilities extended until December 2016

· Group remains on track to deliver another year of strong profit* growth and an operating margin in excess of 7% thus entering the Group's medium term target operating margin* range of 7-9%.

Group Performance

Group sales in the 16 weeks since the half-year are up 1.1%, with strong sales in the 8 week period since the announcement of the interim results, 4.2% ahead of prior year. In the financial year-to-date, Group sales are up 0.5% with a continued strong performance from our largest business Express Gifts.

Overall, the Group remains well on track to deliver another year of strong profit* growth and meet its stated goal of entering the medium term target operating margin* range of 7-9%.

Divisional Performance

In the 8 weeks since the date of the interim results announcement Express Gifts, our largest business, has seen strong product sales growth of c. 11.3% versus the prior year. Margins were lower than last year, due to the product mix and some clearing of seasonal product. Product sales since the half year are c. 4.9% ahead of prior year. Total sales for the business, including financial services income, are c. 3.4% ahead since the half year. Improved credit management has led to an increase in underlying profitability. Overall growth remains balanced with increased spend from existing customers and the addition of new customers (active customer base up 2.2% as at December 2014).

Within our Education Supplies division, we have seen little change in difficult market conditions during the division's seasonally quiet period, and sales since the half year are 9.4% behind prior year. Actions on costs have been taken aimed at improving profitability despite this shortfall.

Kitbag has maintained its strong recovery, experiencing a record month in December. Sales since the half year are up 13.6% and margins have also improved. The business development pipeline remains strong and the strategic review is ongoing.

Within Kleeneze, sales since the half year have declined by c. 21% versus prior year, with some improvement in run rate versus prior year since the interim results announcement. The business has very recently launched 'K Life', a new and additional proposition for distributors and customers, which is aimed at helping distributors with new customer recruitment. The proposition includes a wide range of keenly priced general merchandise product and also carries a different commission structure.

Financial position and extension of facilities

Net borrowings under the revolving credit facilities at the end of December 2014 were £82.4m, a reduction of £36.9m from the level at the end of December 2013. £19.7m of this reduction was the result of increased usage of the Express Gifts securitisation facility, where the limit was increased in January 2014 to £130m from £105m.

We are pleased to announce that we have now extended the term of our revolving credit facilities with our existing lenders, moving the maturity date from 22 March 2016 to 31 December 2016. The margin remains at 3% over LIBOR. The size of the facilities is £134.0m (versus £194.5m at the time of the refinancing in March 2011) with further step downs of £7.5m and £18.0m in March 2015 and March 2016 respectively. These step downs are expected to be met through operating cash flow without reducing headroom. The £130m Express Gifts securitisation facility has also been extended to 31 December 2016.

The completion of the ongoing Kitbag strategic review and broader consideration of the Group's overall corporate strategy will provide greater clarity on the size and shape of the Group's debt capital needs. This extension therefore allows the Group to continue its current progress and strategic plans before needing to commit to longer term debt facilities.

Summary

The Group continues to make good progress, with Express Gifts driving overall performance and Kitbag making a strong recovery. The Group remains on track to deliver full year results within the range of market expectations and achieve an operating margin* in excess of 7% for the full year.

* from continuing operations before tax and exceptional items

Enquiries

Findel plcRoger Siddle / Tim Kowalski0161 303 3465

Tulchan Communications LLPStephen Malthouse / Will Smith020 7353 4200

Notes to Editors

The Findel Group contains market leading businesses in the UK home shopping and education supplies markets. It is primarily a retailer and distributor, handling and supplying specialist products manufactured by third parties.

The Group's activities are focused in four main operating segments, together with a small overseas sourcing operation:

· Express Gifts - one of the largest direct mail order businesses in the UK;

· Findel Education - the largest listed independent supplier of resources and equipment (excluding information technology and publishing) to schools in the UK;

· Kitbag - a leading retailer of sports merchandise; and

· Kleeneze - a leading network marketing company in the UK and the Republic of Ireland.