4th Apr 2007 07:01
Findel PLC04 April 2007 4th April 2007 Findel plc ("Findel " or "the Group") Trading Update Acquisitions of Philograph Publications Limited and Synergy Managed Equipment Services Limited The Board of Findel plc, one of the country's leading Home Shopping andEducational Supplies businesses, today announces a pre-close trading update forthe year ended 31 March 2007, and the acquisitions of Philograph PublicationsLimited, within the Educational Supplies division, and Synergy Managed EquipmentServices Limited, within the Healthcare division. Trading Update The Group has achieved record sales up 8% at £570m. Like for like sales werebroadly in line with last year. It is anticipated that the overall underlyingoperating performance of the Group will be in line with the Board's ownexpectations. Home Shopping Division The year has seen significant development within the division. At the start ofthe year, all the division's sales were made with an offer of credit. That corecredit business has performed well with product sales 5% ahead of last year andthe customer base growing to over 1.5m. In addition as a result of a focusedacquisition strategy implemented throughout the year, we now own and operateseveral leading cash with order brands, with a very strong internet focus, and aleading network marketing company. In order to extract the cost savings andsynergistic benefits from the businesses acquired in the year, an intenseprogramme of reorganisation, relocation and rationalisation is underway. Thedivision has also withdrawn from certain non-core activities through both saleand closure. Educational Supplies Division Continued uncertainty surrounding government financing has meant that theeducational supplies market has had a difficult year. However, as a result ofthe investments we have made in product innovation and consumer orientedmarketing techniques we expect sales to be only slightly down on last year's.Sales in the last three months of the financial year have given some indicationof a return of confidence in the sector and were ahead of last year. The final steps in the major reorganisation of the division were completedduring the year, and our brands now benefit from a simplified and streamlinedstructure which both reduces costs and improves service. During the process anumber of further attractive opportunities for improved efficiency wereidentified which we are in the process of implementing. We are pleased to announce today the acquisition of the Philograph PublicationsLimited Group for cash consideration of £1.3m. Philograph's turnover in the yearended 31 December 2006 was £7.1m. Philograph trades in the UK as Philip & TaceyLtd, and in the USA as Didax Inc. Philip & Tacey is one of Britain's longestestablished educational suppliers with a high reputation for product developmentand specialises in sales to the independent school sector, which is a sector weare seeking to strengthen our position in. Didax was established in 1976 anddistributes both its own products and those of other British suppliers into theAmerican market, both direct to end customers and through other intermediaries. Healthcare Division This year has been a period of consolidation and investment for the Healthcaredivision following five years of significant growth. Sales on continuingcontracts were slightly ahead of last year. However, following our strategicdecision only to pursue contracts that we believe offer long term growth atacceptable margins, overall sales in the year have declined by 9%. A number ofnew contracts and contract extensions have been won during the year which willbenefit us in the coming year. We are also pleased to announce today the acquisition of Synergy ManagedEquipment Services Limited (SMES) for a debt free maximum cash consideration of£1.4m of which £1.3m was paid in cash on completion. SMES's turnover in the yearto March 2007 was approximately £3.3m. SMES provides a managed wheelchairproducts and support service to the healthcare market. This acquisition isparticularly significant given the growing trend in the industry to include themanagement of wheelchairs in Integrated Community Equipment Supplies contracts. Outlook The prospects for the Group's businesses are encouraging. Home Shopping is avery different business to the one it was 12 months ago. The core creditbusiness has performed well and the prospects for the division have been furtherenhanced by our focused acquisition strategy. We expect over 40% of thedivision's sales to be transacted over the internet this year. EducationalSupplies continues to maintain a brand leading position and is a consolidator ina strongly cash generative business sector. Healthcare is now well positioned totake advantage of a potentially fast growing market. We continue to consider the demerger of one of the Group's principal divisions.However, the high levels of activity in the year have necessarily caused somedelay in the strategic review we announced at the start of the year with theimplementation of significant integration plans taking precedence over the pastsix months. We expect the bulk of the integration work to have been completedby September 2007. We believe that the actions we are taking will materiallystrengthen all divisions within the Group and will provide a firmer foundationfor each of those divisions to be even more successful in the future. We willreport further on the question of demerger in due course. Findel intends to announce its preliminary results for the year to 31 March 2007on 17 May 2007. Ends For further information please contact: Patrick Jolly, Chief Executive, Findel plc Tel: 01943 864686 David Dutton Group Finance Director, Findel plc Tel: 01943 864686 Keith Chapman, Chairman, Findel plc Tel: 01943 864686 Jonathon Brill/Billy Clegg, Financial Dynamics Tel: 020 7831 3113 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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