Trading Update

29 January 2016

Findel plc (the "Group")

Trading Update

Findel plc, the UK Home Shopping and Education business, today releases a trading update covering the 17 weeks from 25 September 2015 to 22 January 2016. This should be read in conjunction with the Group's Interim Results announcement issued on 25 November 2015.

Group Performance

Group sales from continuing operations in the 17 weeks since the half-year are up 0.5%, with product sales for Express Gifts up 0.8% in the same period and up 1.3% for the financial year as a whole. Financial services revenues have maintained a stronger rate of growth, increasing 6.4% since the half year and 6.7% for the year as a whole, with bad debt rates continuing to improve. Findel Education saw a continuing reduction in its rate of sales decline in this relatively quiet period in its year.

Express Gifts

The overall level of sales growth from Express Gifts since the half-year was 2.0%, which is marginally lower than the 2.7% growth seen during the first half of the year.

Demand at Express Gifts has seen an encouraging recovery with orders placed since the half year 3.4% ahead of the prior year compared with 2.6% growth in the first half. Orders placed in December were particularly strong at around 10% ahead of the previous year. However, a cautious approach to stock management for our newer ranges led to a lack of availability in December which prevented this healthy demand being converted into sales. Experience of demand for these ranges will allow us to improve demand forecasting as we invest in growing the customer base and broadening the clothing offer next year.

The continued improvement in the quality of the credit receivables has led to a greater proportion of the established customer base being up to date with their accounts. We noted in the interim results that this had had a negative impact on product sales and this trend has continued. It has however produced a significantly lower bad debt charge, higher service charges and a greater level of customer retention. Revenue from financial services is therefore up 6.4% since the half-year.

Express Gifts started to implement a programme of risk-based pricing for its credit offer in November, focussing initially on those established customers who present a higher than average level of risk. This programme will be rolled out to new customers in the coming months which should generate additional financial services revenue. However, to ensure a smooth transition the broader upgrade to the financial services IT platform is now likely to be deferred until after the trading peak in 2016.

Findel Education

Sales for Findel Education have continued to show a reducing rate of decline since the half-year. The overall rate of sales decline has narrowed from 8.2% in the first half to 7.3% with the core Schools brands showing better results. A number of catalogue tests are currently being undertaken, particularly in relation to the Classroom brands as part of the new approach being introduced by the marketing team, which targets stabilising sales in FY17.

The process to integrate the two warehouses into one site is progressing well, with a staged migration of the Enfield brands to Nottingham now underway and scheduled to be completed by the end of the year. We remain confident that this will produce significant benefits from FY18 onwards.

Kitbag

Discussions in relation to the potential sale of Kitbag are continuing and consequently Kitbag continues to be treated as a discontinued business.

Outlook

Express Gifts remains confident of its strategy for medium-term profit growth. However, its performance in Q3 together with ongoing currency headwinds will mean that the full-year profit* for the Group will now be £2-3m lower than our previous guidance. Findel Education is currently operating in line with our guidance for the full year.

Enquiries

Findel plc David Sugden / Tim Kowalski0161 303 3465

Tulchan Communications LLPStephen Malthouse / Giles Kernick020 7353 4200

*before exceptional items