IQ-AI Regulatory News (IQAI)

17 Jan 2008 13:39

Flying Brands Limited17 January 2008 17 January 2008 Flying Brands Limited Trading Update Flying Brands ("the Group"), the Jersey based home shopping group, is todayproviding an update on its trading performance during the second half of 2007. Since the Group's last announcement on 23 October 2007, trading has been mixed.Flying Flowers had a disappointing Christmas campaign as a result of weakexternal advertising response and customer faith in postal deliveries not beingfully restored in the aftermath of the Royal Mail strike. Greetings Direct'slate second half performance in the UK was also weak. There was good tradingfrom our other brands and positive growth on the internet but this was notenough to offset the negative results of the poor Flying Flowers' performance.The net outcome is that the Group's full year trading results are likely to beslightly below market expectations. Total sales for the second half were flat on 2006, although internet salesincreased by 13%. Up until 16 January, the board of Flying Brands had been in advanced discussionsto acquire a relatively significant private retail business, with negotiationshaving commenced during the second half of 2007. Given current market andtrading conditions, the board has now decided to concentrate on developing theexisting Flying Brands business and not to proceed with this transaction. Thiswill result in a write off the fees connected to due diligence. This will have aone off impact of around £750,000 on the Group's 2007 profits. Tim Trotter, Chairman, commented: "In a very challenging trading environment, we have experienced a series ofissues, both internal and external, that has made the second half of 2007 bothdifficult and disappointing. However, the success of the launch of GreetingsDirect in Australia demonstrates the considerable potential of this brandinternationally and we will capitalise on this opportunity in 2008." Outlook The current market environment remains challenging and the board remainscautious on the outlook for 2008. The Group's priority is to focus on investingfor growth and actively managing the cost base. As such up to £2 million will beinvested by the Group in its core businesses, especially Flying Flowers,Gardening Direct and Greetings Direct. The priority will be internetdevelopment, new customer recruitment, geographical expansion and hiring theappropriate staff. Unfortunately, further double digit distribution costincreases from Jersey Post will hamper progress in the UK. Greetings Direct willbe extended substantially in Australia and will also be tested in both NorthAmerica and New Zealand. However, with the continuing growth of our online sales, and our move to a moredynamic web platform in February, we are confident of increasing the volume ofnew customers from the internet. The effect of our investment will impact 2008'sresults, but will lead to a stronger Group in subsequent years. Board Changes Mark Dugdale, the Group's Chief Executive since 2002, has indicated to the boardthat he wishes to leave the Group to pursue another interest in the privatesector. Although no agreement has yet been reached, discussions are continuingbetween him and the board as to the terms on which he might be released from hisservice agreement. It is anticipated that these discussions will be concludedsoon and that Mark Dugdale will leave the Group on or before the AGM on 23April. The board has put in hand the recruitment of a successor. James McMahon has decided to resign as a non executive director with immediateeffect. Stephen Cook (aged 47), who has recently been working with West Coast Capitaland was formerly group strategy director and general counsel at TelewestCommunications plc, has been appointed to the board as a non executive directorwith immediate effect. No other information is required to be disclosed pursuant to paragraph LR9.6.13R of the Listing Rules of the Financial Services Authority. For further information, please contact: Flying Brands Limited 01245 228 300Mark Dugdale, Chief ExecutiveGraham Norton, Finance Director Smithfield Consultants 020 7360 4900John KielyGeorge Hudson Notes to editors Jersey based Flying Brands Limited (LSE: FBDU) is a multi brand home shoppingspecialist. Founded in 1981, it was admitted to the Official List of the LondonStock Exchange in 1993. The Group operates the following divisions: • Gifts (Flying Flowers, the UK's largest flowers by post brand, despatching nearly one million bouquets a year; Greetings Direct, the UK's only continuity greeting cards business) • Garden (Gardening Direct, one of the UK's largest mail order bedding plants and gardening products operations; Garden Bird Supplies, a leading provider of food and accessories for birds and other wildlife; Sarah Raven's Kitchen & Garden, high quality plants and general hardware that are hard to find elsewhere) • Entertainment (Listen2, the leading mail order audio books, nostalgic music, DVD and video publisher and distributor; Benham, the first day cover stamps and coins collectables specialist) More information can be found at: www.flyingbrands.com This information is provided by RNS The company news service from the London Stock Exchange