LONDON (Alliance News) - Findel PLC on Wednesday reported a narrowed pretax loss in the first half of its financial year, although revenue slipped as sales growth in the Express Gifts business was lower than expected.
The home shopping and education business said its pretax loss in the 26 weeks ended September 25 narrowed to GBP0.6 million from GBP1 million in the first half of the prior year, even though revenue fell slightly to GBP191.4 million from GBP192.2 million.
The Express Gifts business saw revenue growth of 2.7%, which Findel said was below expectations due to an unexpected slowing in demand from autumn catalogues. In response to this, it will make "prudent refinements" to credit policies and buying practices to stimulate growth and will increase investment into all-year round customer recruitment.
Meanwhile, Findel said it is making good progress in rebuilding Findel Education, despite difficult market conditions. Revenue fell 8.2%, but the rate of customer number decline has eased in core markets, the company said. The new warehouse and IT system consolidation project will lead to annual cost savings of GBP2 million to GBP3 million from financial 2018 onwards, Findel added.
Findel added that revenue since the period end is up 2.2% on the equivalent period last year. Full-year sales are expected to be broadly level with the prior year, while pretax profit before exceptional items will increase significantly in line with market expectations.
Profit growth in financial 2017 will be subdued, however, due to investment in Express Gifts, although the returns from this together with Findel Education's business transformation projects are expected to yield incremental profit growth, Findel said.
"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," Chief Executive David Sugden said in a statement.
Findel added that discussions are ongoing over the sale of its Kitbag sports retailing business as the buyer is taking longer than expected to finalise its funding for the transaction. Sales in Kitbag declined 2.1% in the half year.
Earlier this month, Findel said Sports Direct International PLC, which had taken an 18.93% stake in Findel in September, had requisitioned a general meeting of the company in order to propose the appointment of a representative to the board. Findel said Wednesday it will call the meeting but didn't provide a date.
Shares in Findel were trading down 2.4% at 222.00 pence Wednesday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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