Findel hails 'solid' first half
In the 26 weeks to 25 September, group revenue was £191.4 million while pre-tax profit before exceptional items was £3.4 million.
The group’s largest business, Express Gifts, performed below expectations with revenue growth of 2.7% and flat operating profit. Findel said this was a reflection of a tougher autumn particularly with regard to recruiting new customers.
Findel said it made good progress in rebuilding its education business’s competitive position despite difficult market conditions. It said there were early signs of recovery in market share for the core school brands. Revenue was down 8.2% for the business although the rate of customer number decline eased in core markets.
The group expects sales for the full year to be broadly level with the prior year, with Findel’s continuing operations expecting to drive a significant increase in pre-tax profit for the 2016 financial year.
Findel said its investment in growth in Express Gifts will subdue profit growth in the 2017 financial year, but the returns from this together with Findel Education's business transformation projects is expected to yield incremental profit growth.
David Sugden, Findel executive chairman, said: "Express Gifts has seen a remarkable improvement in its performance over the last four years and the business is confident that the recent slowdown in new customer recruitment will be reversed in future campaigns. The plans for recruitment all year round and maintaining the focus on delivering good value products to its 1.4 million customers position it well for the future.
“Findel Education is starting to make encouraging progress in recovering its market share. The steps we have taken to rationalise its warehousing overhead, combined with the key appointments made to strengthen its marketing and digital strategies provide a strong platform for significant medium-term profit growth.
“The refinancing of our debt facilities together with ongoing debt reduction provide a sound financial platform to develop the full potential of these two businesses.
“Overall, we remain well positioned to deliver an increase in profit before tax for the full year in line with expectations."
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