IQ-AI Regulatory News (IQAI)

23 Oct 2007 07:02

Flying Brands Limited23 October 2007 23 October 2007 Flying Brands Limited ("Flying Brands" or the "Group") Trading Update Flying Brands, the Jersey-based home shopping group, is today providing anupdate on its trading performance since its last announcement on 27 July 2007. Trading and one-off issues Group trading has been affected by the following series of recent adverse eventswhich have had a material negative impact on current trading and will affect theGroup's performance for the twelve months ending December 2007: • Despite our best efforts to communicate with customers and offer them alternative, courier delivered flower bouquets, the recent Royal Mail strike disruptions have had a material negative impact on demand for the Group's products. This has been driven by both the delay in catalogues reaching the Group's customers and, more significantly, the Group's ability to deliver live product for both the Flying Flowers and Gardening Direct businesses. This has led to cancellation and wastage and has impacted both consumer confidence and order volumes. • While the Group's launch in Australia has significantly exceeded internal forecasts in terms of customer acquisition, it has led to more costs being incurred this year as the Group has shipped a larger number of additional starter packs to new customers than expected. The Directors expect this investment in the customer base to deliver stronger revenues and profits in 2008. • The poor weather in August has affected gardening activity in the UK and has therefore depressed customers' response to Gardening Direct's Autumn marketing campaign. An improved performance in September has not offset this negative impact. • Returns and bad debt levels on Greetings Direct for September were higher than expected. • Due to pressures in the CD and DVD markets, the Group has decided to write off its investments in the Jersey-based internet company Mail Direct Limited, which trades as taxfreeshopping.com, and discontinue its joint venture. The Group is also expecting to receive a significant VAT rebate relating to theGarden Bird Supplies brand. Outlook The series of trading and one-off, non-recurring issues since July, particularlythe postal strike, have impacted the Group's overall performance. Historically the second half performance in the Group has been reliant on theFlying Flowers Christmas campaign. This could be seriously affected if thepostal service continues to be unreliable in the coming months. Trading in the other brands (Listen2, Benham, Garden Bird Supplies and SarahRaven's Kitchen and Garden) is currently in line with expectations and thistrend is expected to continue for the remainder of the financial year. Commenting on the trading performance, Mark Dugdale, Chief Executive, said: "We have made every effort to advise our customers of the status of their ordersand offer them, where appropriate, discounted courier delivered alternatives;however, Flying Brands' marketing proposition relies heavily on shipping liveproducts in narrow delivery windows and hence the impact of even a short postalstrike has had adverse consequences on the Group. Consumer confidence will alsohave been dented, which makes trading in what is already an uncertain retailenvironment extremely challenging. Nevertheless, the success of Greetings Directin Australia demonstrates that our strategy is still working and we willcapitalise on this in 2008." For further information, please contact: Flying Brands Limited 01376 575 010 / 07785 346 935Mark 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 shoppinggroup. Founded in 1981, it was admitted to the Official List of the London StockExchange 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 and Garden for hard to find plants and household accessories) • Entertainment (Listen2Books, the leading mail order audio books, DVD and video publisher and distributor; Benham, the first day cover stamps and coins collectables specialist; Silverminds Direct, the nostalgic music business) More information can be found at: www.flyingbrands.com This information is provided by RNS The company news service from the London Stock Exchange