Findel seeks £80m to revive its fortunes

HOME shopping, education supplies and healthcare markets specialist Findel today revealed plans to raise £80m of new equity funding as it set out a plan to boost profits performance.

The company which has moved its head office from Yorkshire to Accrington, Lancashire, said its “full potential review”, which has now been completed, had identified “significant potential for enhanced performance” through a “back to basics” approach requiring targeted investments of around £35m.

Findel wants to refinance its balance sheet and said negotiations were at an advanced stage on a new five-year committed debt facility and it was looking to raise £80m to fund operational improvements and pay down debt.

Also reporting its half year results for the 26 weeks ended October 1, Findel saw revenues drop by £10m from the same period last year to £264m. Loss before tax also decreased from £22.7m to £15.5m.

Findel increased operating profit from continuing operations to £6.2m.

David Sugden, chairman of Findel, said: “I am pleased to report that in the 26 weeks ended 1 October 2010 we have begun to make real progress towards improving the group’s performance and profitability and securing its longer term success. 

“Our ‘full potential review’ has identified that our existing businesses are capable of significant improvement in profit performance. We are at an advanced stage in our negotiations with our major shareholders and lenders to agree a comprehensive refinancing of the group’s balance sheet.

“This would provide a solid platform to enable the operational improvements identified in our review to be implemented swiftly, whilst also reducing the group’s net indebtedness.”

The review aimed to find opportunities to grow revenue and profitability in each of Findel’s businesses and it believes in the main these opportunities “for the most part lie within our control”.

Findel – which has operations including home shopping, Express Gifts, Kleeneze, Middleton-basedd Kitbag, educational supplies and healthcare, said it could take three to four years to achieve its goals.

The £35m investment will be used to deliver systems upgrades, new contract wins and efficient management of projects and resources.

Findel said its two largest shareholders – Toscafund and Schroders, who collectively control more than 50% of its sharesl – have confirmed that they are supportive of the proposed restructuring and have indicated that they intend to support the equity raising. The group aims to launch the equity issue early in the New Year.

Findel offloaded parts of its business earlier this year.