LONDON (Alliance News) - UK home shopping and education business Findel PLC announced Thursday that Chief Executive Officer Roger Siddle will step down at the end of March, while also issuing a trading update that cited stronger sales growth since the end of the first half.
Findel, whose largest division is a direct mail-order business, said Siddle was appointed CEO back in September 2010 when the group was "severely challenged".
"Under [Siddle's] leadership Findel's performance has improved significantly and net debt has been materially reduced. Given the considerably strengthened position of the group and the Kitbag strategic review, with the potential for change in the shape of the group, Roger has decided that this is the appropriate time for him to pursue alternative options for his career," the company said in a statement.
Findel said that in light of a potential "change in the shape" of the group, it will not look for a new CEO immediate, and instead Non-Executive Chairman David Sugden will become executive chairman at the beginning of March. The company said it will then consider the "appropriate longer-term leadership structure".
"[Siddle's] leadership, expertise and dedication have helped to transform a group that was in real distress into one with increasingly strong performance and prospects," said Sugden.
Findel also said trading has improved since the first half, with group sales in the 16 weeks to January 16 up 1.1%, better than a flat year-on-year sales performance in the first-half of the year. In the last eight week its said sales grew by 4.2% year-on-year, again driven by its largest business, Express Gifts, which in the period saw strong product sales growth of around 11.3%, although margins were lower than last year as it had to clear some seasonal stock.
"The group continues to make good progress, with Express Gifts driving overall performance and Kitbag making a strong recovery. The group remains on track to deliver full-year results within the range of market expectations and achieve an operating margin in excess of 7% for the full year," the company said Thursday, highlighting that in the year-to-date group sales are up 0.5%.
The group's profit and operating margin excludes tax and exceptional items. Findel said it has a medium-term target operating margin range of between 7% and 9%.
Late last year, Findel commenced a "full strategic review" of its struggling Kitbag sports retail business, saying it was the "right time" given the substantial improvement in the underlying operations and contract base for the business.
"Kitbag has maintained its strong recovery, experiencing a record month in December. Sales since the half year are up 13.6% and margins have also improved. The business development pipeline remains strong and the strategic review is ongoing," the company said.
Elsewhere, Findel said its Education Supplies division continues to face "difficult market conditions", hence sales since the half year are down 9.4% on the prior year.
"Actions on costs have been taken aimed at improving profitability despite this shortfall," said Findel.
The group said its underperforming network marketing business, Kleeneze, has seen sales fall around 21% since the half year, albeit an improvement on the first-half, when sales from the business tumbled 24%.
Findel said it has managed to extend the terms of its revolving credit facilities with its existing lenders, moving the maturity date by nine months to end-December 2016.
"The completion of the ongoing Kitbag strategic review and broader consideration of the group's overall corporate strategy will provide greater clarity on the size and shape of the group's debt capital needs. This extension therefore allows the group to continue its current progress and strategic plans before needing to commit to longer term debt facilities," said Findel.
Findel shares were up 1.5% at 207.00 pence mid-morning Thursday.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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