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Findel flagship brand Express Gifts reports first full-year growth in five years

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Home shopping group Findel today reported full-year growth for the first time in five years in its flagship ecommerce and mail order brand Express Gifts.

This was part, it said, of "overall" good progress in its turnaround plan for its businesses, which also include multichannel sports kit business Kitbag.com

But the update came as Findel reported falling revenues and profits at the bottom line. It reported a fall in revenues to £537.8m in the year to March 30 2012, compared to £540.7m in 2011. The company said that before exceptional items and terminated businesses were counted, sales were up from £532.6m last time.

Pre-tax profits before exceptional items of £22.8m came in at £10.7m, 53% up from last year’s £7.0m. But after those exceptional items, which included the £7.6m cost of warehouse reorganisation, an £8.4m writedown of goodwill and the £3.4m cost of debt refinancing, the company recorded a loss of £12.1m, increased by 764.3% from last year’s loss of £1.4m.

“During the first year of our Full Potential plan our focus has been on implementing the key initiatives required to reverse the downward trajectory of the group and bring it back to profitable growth despite an increasingly unstable economic background," said group chief executive Roger Siddle.

"Overall, we are pleased with the progress that has been made and are particularly encouraged by the good start which has been made to the current year. We remain confident that we are following the right path to achieve improved shareholder returns."

Today Findel said Express Gifts had seen operating profits grow for the first time in five years, rising by 18.2%, or £2.9m, to £18.8m on sales that were up by 8.3% at £231.8m. “Our aim to rejuvenate Express Gifts has been successful, with a return to strong growth and improved returns,” said Siddle. Investments in improving systems and behavioural credit scoring at Express Gifts were, “on plan and on budget and should start to contribute to operating profit improvements in the current year.”

Findel also reported a “strong start” to the task of placing Kitbag.com “on a stronger footing.” It said legacy issues, such as unprofitable contracts, margin management and inventory control had led to a £4.2m operating loss, from a £1.9m loss the previous year, on sales up 4.6% at £60.7m. Under a new management team unprofitable contracts had been renegotiated and new contracts won, with a relaunch of the Kitbag website now planned. “Whilst Kitbag's profit performance this year is disappointing, it is driven by legacy issues that have largely been addressed during the year and we continue to be excited by the opportunities for this business,” said Siddle.

Beyond ecommerce, Findel said the home distributor-based Kleeneze business was growing, the healthcare business had “maintained its strong position” and the education business was stabilising.
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