Findel back in the black after year of acquisitions

Findel has achieved record sales and profits for the six months
ended 30th September. Its interim results buck recent gloomy
outlooks from other listed retailers–DSGI and Mothercare, for
instance, are both “cautious” regarding 2008.

Findel saw sales rise 33 per cent, to £298.3 million. It delivered a profit before tax of £2.5 million, against a loss of £23 million for the comparable period in 2006. Recent acquisitions have helped boost Findel’s top line: It bought home decor cataloguer The Cotswold Company in February 2007; several businesses from European Home retail, including licensed football gear website Kitbag, homecare products supplier Kleeneze and gifts and gadgets merchant I Want One of Those in October 2006; and toys cataloguer Letterbox Mail Order in June 2006.

Chairman Keith Chapman told the City he attributes Findel’s progress to the performance of the home shopping division and the growing popularity of the internet; online sales now account for more than half of all Findel’s home shopping sales. Findel’s credit business is also holding up: Product sales are up 11 per cent, and customer retention is 70 per cent. Bad debt remains “under control and within budget”.

The only sting in the tail was the challenge of integrating Kleeneze into the group. Though the interims state Kleeneze is “now positioned for growth” and has “tremendous potential”, this was achieved after significant upheaval. Findel said that moving the operation from Bristol to Accrington, when very few key staff were prepared to make the move, was “always going to be a difficult exercise”. Nevertheless, having achieved the move, Findel said it is upbeat about the brand’s future.

Findel is also optimistic about Kitbag. In a move to become to become a “strong generic brand for all sport” and move beyond its footballing roots, Kitbag has signed contracts with the English Cricket Board and Formula One to design, develop and manage online stores for them.

Findel’s healthcare and educational supplies divisions, meanwhile, both saw a sales increase. For 2008, Findel will focus on maximising revenue from its existing contracts and brands to grow market share, though it is not ruling out additional acquisitions.

Chapman is very positive about the group’s prospects, “Findel is in the right place at the right time,” he said in a statement. “We have no exposure to the high street. Home shopping retail is balanced by blue-chip educational business. We have a strong and growing credit business, we have developed an exciting cash-with-order business, and we have a major presence on the internet. We look forward to a successful outcome for the full year”.


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