Findel posts £60m loss as it increases bad debt provision

Hyde-based Findel Plc has posted a full year pre-tax loss of £59.4m as a result of onerous lease costs and customer financial redress.

Group revenue increased 11.3% to £457m, with adjusted profit before tax from continuing operations of £22.2m, down by £2.6m, which the company said was down to investment for future growth and digital transformation.

The group has increased its bad debt provision for Express Gifts to £35.2m.

Findel said this, along with £21.2m relating to impairment of intangible assets; £7.5m for onerous lease provisions, following the relocation of head office functions; and £14.7m for financial services redress and refunds at Express Gifts all impacted on the bottom line.

Phil Maudsley, chief executive, said: “Whilst this is disappointing, it is a necessary measure and we have now addressed a number of judgemental issues for the benefit of our customers.

“Looking ahead, the new management team is confident in delivering against the respective strategies of both businesses.

“The ongoing operational improvements being made provides a strong platform for future growth and I am excited about the prospects for the group as we enter the new financial year.”

The Express Gifts arm produced a strong sales performance, driven by an increase in new customers.

Maudsley said: “At Express Gifts, the ongoing investment in our product offer and our move to year-round customer recruitment is already resonating well and delivering strong results. In particular, the 17% rise in customer numbers to 1.6 million is very encouraging, and underlines the strength of our strategy.”

Meanwhile the group’s education supplies arm Findel Education had a challenging year but Maudsley said a clear strategy for transformation is in place.

During the year, the division’s warehouse consolidation project completed and the group said it is expected to deliver annual savings of £2-3m this financial year.

“At Findel Education, we are addressing market share decline through a clear strategy based on value, service and digital,” said Maudsley.