LONDON (Alliance News) - Findel PLC on Tuesday said it swung to a loss in its last financial year due to exceptional costs and increases in provisions it had to make, but revenue rose as growth in Express Gifts offset a decline at Findel Education.
The home shopping and education supplies business said it suffered a pretax loss of GBP1.7 million in the year ended March 25, having made a GBP527,000 pretax profit the year before, despite revenue rising to GBP410.6 million from GBP406.9 million.
By division, Express Gifts experienced a mixed performance in the year, Findel said, but ended strongly. Product sales in this business grew by 2.3% to GBP224.9 million, while financial services revenue rose by 7.6% to GBP88.1 million. Findel said sales since the start of calendar 2016 returned to "healthy levels" in line with medium-term objectives.
Findel Education, meanwhile, suffered a difficult financial year "reflecting market conditions", with sales down by 8.1%. Findel said average spend levels continue to fall due to customer budget constraints.
Profit was hit by exceptional items of GBP26.5 million related to customer redress and refund provisions at Express Gifts, a warehouse consolidation project for Findel Education, and an increase in provision for impaired receivables in Express Gifts.
However, profit was still lower even when excluding the exceptional costs, at GBP24.8 million from GBP27.7 million, with operating profit declining in both Express Gifts and Findel Education. Findel said this was due to the impact on the price of imports of products from Asia due to the fall in sterling.
Findel said it has made a "solid start" to the current financial year, particularly in Express Gifts, which has achieved underlying sales growth "at a healthy level in line with expectations". Conditions at Findel Education remain challenging, it added.
"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," Executive Chairman David Sugden said in a statement.
"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," he added.
Sugden is stepping down from his role at Findel's upcoming annual general meeting. Findel said the search for a replacement is "well advanced".
Shares in Findel were trading up 5.5% at 163.50 pence on Tuesday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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