Findel’s pre-tax losses widen

RESTRUCTURING costs and writedowns caused pre-tax losses at home shopping group Findel to widen to £12.1m in the year to March 31 (2011: £1.4m loss).

The Hyde-based company’s turnover also fell slightly to £537.8m (£540.7m), although like-for-like sales discounting the impact of discontinued operations showed a growth of 1%.

The company hailed the performance of its Express Gifts business, which grew sales by 8.3% and operating profit by 18.2%.

It also said that it made a pre-tax profit before exceptionals of £10.7m, but heavy one-off restructuring costs of £11.1m (largely relating to redundancies and an £8.4m writedown in the carrying value of its education supplies business meant it slipped to a loss.

Group chief executive Roger Siddle argued that its Kleeneze business was now witnessing year-on-year sales growth after many years of decline. The cleaning products supply business which works with a network of direct sales distributors witnessed a first-half decline in sales of 9.2% but trimmed this to 1.4% in the second half and is now showing growth.

He attributed this to changes to the way in which it recruits distributors and the introduction of new product ranges.

The company’s football retail business, Kitbag, which runs stores for Manchester City and Everton as well as an online stores for several major clubs, declared an operating loss of £4.2m compared with a profit of £1.9m last year, which Siddle attributed to a decision taken by its new management team to extricate itself from a series of lossmaking contracts.

Operating profits also halved at its education supplies arm to £839,000 (£1.6m), but again Siddle argued that progress had been made. He said the division had started the year “hampered by very poor supplier relationships”, which had impacted on the service and prices it received, causing market share to decline.

This was overhauled during the year, and although teacher-led spending on curricular products is still slow as a result of public sector budget pressures, the consumables side witnessed growth of 5%. The introduction of a new catalogue in April since its year end has helped to shore up sales, he added.

Siddle said that its healthcare business remains strong (operating profits improved by 5% to £2.2m) and that it has a healthy pipeline of potential contracts.

“Overall, this year has primarily been one of consolidation,” he said, arguing that it was the first of a three-year recovery plan embarked upon after its refinancing in March last year.

“Our focus has been on stabilising the business and creating a positive trajectory.  We have made good progress in this across the Group and have a focussed and strengthened management team driving the businesses forward.

“Although some of our businesses are further advanced than others, we are confident we have built a secure base for improved future performance and returns.”