Flying Brands Share News (FBDU)

Flying Brands joined the list of retailers bemoaning December's bad weather, as it warned that full year profits will be materially below market expectations. Sales in the fourth quarter totalled £6.4m, up from £5.7m in the final quarter of 2009, but like for like sales were down at £5.0m from £5.7m the year before.Fulfilment of Christmas orders was severely disrupted by the worst of the weather conditions and the company was forced to stump up a pretty penny in refunds for delays in the delivery of the sort of perishable goods in which the group specialises. The level of refunds and replacements was six times higher than the levels of previous years and for which the company had budgeted.In the Flying Flowers business, sales in the fourth quarter fell to £3.3m from £3.6m a year earlier. The company estimated that Flying Flowers lost £0.5m of sales as a result of the adverse weather conditions.Sales in Flowers Direct for the period were £1.1m, with the shortfall attributed to bad weather estimated at around £0.1m. However, even leaving aside the effects of the snow, the sales performance of this brand during the period was significantly below management expectations.Overall sales in the Gifts Division for the period were £4.5m compared to £3.6m last year. Sales in the Garden Division for the three months were £1.5m (2009: £1.5m). Like-for-like sales for this division for the period were £1.2m (2009: £1.5m). Gross cash at the end of 2010 stood at £2.1m, half the level it was a year earlier. The group has elected to pay off some of its debts early to reduce the likelihood of breaching banking covenants, though the company's bank has agreed, in any case, to "waive the breach of covenant should it in fact occur" and has rubber-stamped the revised repayment schedule.Having only returned to paying dividends last year the board's current plans for payment of a final dividend in respect of 2010 remain unchanged."Looking forward, we expect significant cost inflation in our businesses in 2011, particularly in the areas of paper prices and postage but we continue to believe that our value-for-money products make us well placed to do well at a time of pressure on consumers' disposable income. We are also encouraged by the continued growth in our Web sales, both as a percentage of overall sales and in absolute terms," the statement said.