13th October 2016
Findel plc (the "Group")
Post-close Trading Statement and Update
Strong progress against our objectives
Findel plc, the UK Home Shopping and Education business, today releases a trading update ahead of its interim results announcement for the 27 weeks1 ended 30 September 2016.
The Group has recorded a good sales performance in the first half with overall sales on a like-for-like basis c.6% ahead of the prior year, with Express Gifts continuing to perform well and Education showing a marked improvement. This encouraging performance underpins our confidence in the Group's ability to deliver full-year results in line with current expectations.
Within Express Gifts, like-for-like product sales for the half-year were 12% ahead, reflecting the anticipated slight moderation of the growth rate seen earlier in the period. Total sales, including an improved financial services yield, were also up 12% and Express Gifts' customer base has grown by 12% since the start of 2016. This growth has been driven by a combination of growth from the established customer base of c.9% and a very strong response to the new recruitment campaign. The business is well on the way to achieving its target of recruiting 100,000 new customers, on a net basis, for the full-year as the recruitment process has exceeded expectations as a result of the extra investment in customer acquisition. As previously guided, bad debt costs are expected to rise this year as a result of refinements to the management of the credit book, lower debt sales than expected, and the increase in product sales. Given the strong progress on customer recruitment and the operational improvements introduced over the past twelve months, the business is well positioned for the remainder of the year with its peak trading weeks still to come.
Findel Education has seen an improved trading performance in the second quarter, which is the business' peak period due to the commencement of the new school year. In Q2, revenue from its Classroom and Specialist UK brands were marginally ahead of the same period in 2015, with a moderation in the rate of decline in the lower-margin School brands. Adjusting for the revised timing of sales under the Sainsbury's Active Kids contract, total sales in the first half are down by c.5.5% with sales in the second quarter down by c.3%. Whilst pricing conditions remain extremely competitive and budgetary pressures persist, we are encouraged by continued progress, and particularly by the market share gains now being made by our Classroom and Specialist brands. The warehouse consolidation project is on schedule and expected to be completed by the end of the calendar year. Expectations for the division for the full year remain unchanged.
Update on leadership
The search for an independent Executive Chairman to replace David Sugden, who had intended to step down at the AGM, is ongoing and we expect to make a further announcement shortly.
1: The current financial year will be a 53-week period ending on 31 March 2017, with the first half of the year being a 27-week period ending on 30 September 2016. References to "like-for-like basis" mean comparisons with the 26-week period to 30 September 2016.
David Sugden / Tim Kowalski
0161 303 3465
Tulchan Communications LLP
Stephen Malthouse / Will Smith
020 7353 4200
This information is provided by RNS