Flying Brands acquires Greetings Direct

Flying Brands, the parent company of Flying Flowers, Gardening
Direct, Garden Bird Supplies, Listen2Books and Silverminds
Direct, has bought Greetings Direct for £11.9 million. The
business is being acquired from its current private shareholders
who include Marten Nilsson, its managing director, and will form
part of a larger gifts division alongside Flying Flowers.

Greetings Direct was established in 2002 by Nilsson who will
continue as MD together with the other seven members of staff.
Some of Greetings Directs outsourced functions will be integrated
within the group’s current operations over time.

Trading as Cards For All Occasions, Greetings Direct currently
operates in the UK and Republic of Ireland, and following a
recently completed successful trial campaign in Holland will
commence trading there this Autumn. The business operates via a
direct continuity scheme, in which customers are sent a package
of selected cards each month which they may purchase or return.
It has a database of 700,000 customers, of whom 52,000 are
currently receiving monthly card packs. The database has a
similar profile to that of Flying Brands’ with female customers
representing over 90 per cent. The group feels that the
continuity nature of the acquired business will contribute to
more “predictable year-round sales” and reduces its
reliance on seasonal offerings.

Commenting on the acquisition, Flying Brands’ chief executive,
Mark Dugdale, said, “This acquisition fits our ongoing
strategy perfectly. Greetings Direct has grown strongly since it
was established in 2002 and has the potential to continue this
growth both in the UK and in other markets. There are excellent
synergies with our existing databases for cross-selling products,
which, combined with good cash generation and a strong management
team, should continue to enhance our overall value.” He
added that the new business will help smooth out some of the big
“peaks” that its other brands experience, adding,
“we also liked the fact it generates substantial cash and
is immediately earnings-enhancing as well as having a strong
management team who are staying with us.” Greetings Direct
is a high margin, cash generative, profitable business and in the
financial year ended 31 August 2005, generated turnover of
£8.5m, with earning before tax of £1.2m. Estimated
turnover for the financial year ended 31 August 2006 is
£11.8m, with an estimated EBIT of £2m. The gross assets
of Greetings Direct at 31 August 2006 were £5.7m.


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