Findel suffers profits dip but is ‘building for future’

GREATER Manchester-based home shopping and education supplies company has suffered a dip in pre-tax profits with parts of its business undergoing “challenging trading conditions”.

Profits for the listed Hyde-headquartered company, which emloys up to 2,500 people in the North West, were down 10.6% to £24.8m (2015: £27.7m) for the year ended March 25, although total revenue was up 0.9% to £410m (2015: £406.9m).

During the year the listed company completed the successful sale of Kitbag for about £14m and the group said it is now solely focused on the growth of its two core businesses.

Express Gifts saw a mixed performance during the year but ended strongly and Findel Education had a difficult year reflecting market conditions, but is on plan to deliver its transformational programme.

Finance director Tim Kowalski said the blip in growth of profits was in line with expectations and followed four years of profit growth.

He told TheBusinessDesk: “We have experienced a pause, but we are all about the future.

“We have invested in capital expenditure, so the money we’re making is going into the business and paying off the debt, so this is very positive for the future.”

The company incurred exceptional items costs totalling £26.5m recognised during year of which £14.4m relates to customer redress and refund provisions at Express Gifts.

There was £5.6m in respect of the warehouse consolidation project for Findel Education and £4.3m relates to an increase in provision for impaired receivables in Express Gifts.

About £3m was incured to correct an area of previous non-compliance with IAS 39; and £1.3m to reflect refinements made to estimation models used for receivables provisioning in light of changes to receivables collection processes over the last two years. 

Findel said new bank facilities agreed in November 2015 which run to December 2019 and weree on much improved commercial terms.

Meanwhile, David Sugden is to step down as executive chairman at the upcoming annual meeting with the search for a replacement well advanced.

Sugden said: “In terms of financial performance, last year was more challenging than we expected.

“However, considerable progress has been made in strengthening the Group in a number of areas that will improve longer term prospects. 

“We now have a well-financed group focused solely on the growth of two core businesses – Express Gifts and Findel Education.

“We believe that this represents a turning point in the development of Findel, as, with the successful sale of Kitbag, we can now focus entirely on generating enhanced shareholder value from strong organic growth in our two core businesses.

“With the progress made in the business fundamentals, together with the actions we have taken to address last year’s profit performance, we are confident that we will return to profitable growth in the current and future years.”