Findel PLC AGM Statement (5907F)
July 29 2016 - 1:00AM
UK Regulatory
TIDMFDL
RNS Number : 5907F
Findel PLC
29 July 2016
29 July 2016
Findel plc (the "Group")
AGM Statement
"AN ENCOURAGING START TO THE YEAR"
At the Annual General Meeting to be held at 11.00am today David
Sugden, Chairman, will make the following remarks on trading for
the 17 week period from 26 March 2016 to 22 July 2016.
Current trading performance
The Group has made an encouraging start to the year, with
overall sales up 5.3% on the prior year.
Within this, the group's largest business, Express Gifts, has
seen a very strong early response to its new marketing campaigns
and is making good progress against its net new customer target of
100k for the full year with product sales growth of 14.5% for the
year to date. Product sales growth is expected to moderate as
recruitment investment into peak season moves closer to prior year
levels. Much of the recent campaign, which includes TV advertising,
is based around deeply-discounted introductory offers such that the
gross margin rate is lower and marketing costs are higher than in
the equivalent weeks of FY16. Financial services revenue growth
remains strong as a result of product sales growth and the roll-out
of risk-based pricing, although the higher number of new customers
is likely to lead to a slight increase to the overall bad debt
charge for the year.
Findel Education has continued to see difficult market
conditions with increased pressure on the proportion of budgets
being allocated to educational resources within schools in recent
weeks. After adjusting for timing differences on the Sainsbury's
Active Kids scheme, year-to-date sales are c.8% less than the
equivalent period of last year, however the business is close to
halting the market share decline. The warehouse and systems
integration projects remain on track to be completed in calendar
2016 and to deliver the planned benefits for FY18. In view of
market conditions, the target of maintaining sales at prior year
levels is unlikely to be achieved and the operating profit for FY17
for this business is therefore expected to be lower than previously
anticipated.
Vote to leave the European Union
The Group's hedging strategies mean that around 70% of planned
US$ purchases for the next 12 months and around 80% in the current
financial year have been covered at an average rate of
c.GBP1=$1.44. The Group is therefore well positioned to mitigate
any currency effects of Brexit in the current financial year. The
effect on consumer confidence is being closely monitored but at
present does not appear to be affecting sales.
Update on discussions with Sports Direct International (SDI)
On 1 July 2016 the Board of Findel announced that it was in
early stage discussions regarding a possible commercial supply
agreement with SDI and a proposal that Mike Ashley be appointed
Chairman of Findel to replace David Sugden, who had previously
indicated his intention to step down from the Board at the
conclusion of today's AGM.
The Board remains of the view that there is merit in a
commercial supply agreement with SDI, but SDI are unwilling to take
this forward until the role of Mike Ashley on the Findel board is
clarified. Discussions on both topics are ongoing.
Update on leadership
The Board has decided not to appoint Mike Ashley as Chairman and
will now move as quickly as possible to appoint an independent
Executive Chairman. As a result of the delays to this appointment,
David Sugden will continue as Executive Chairman beyond his planned
departure date until such time as a replacement has been
appointed.
Outlook
Whilst it is still early in the year, and with the peak selling
season for Express Gifts still to come, the strong product sales
and improved financial services income in that business are
expected to compensate for weaker margins and the difficult
conditions facing the education supplies market. As a result, the
Board continues to anticipate an overall Group performance in line
with expectations for the full year.
Enquiries
Findel plc
David Sugden / Tim Kowalski
0161 303 3465
Tulchan Communications LLP
Stephen Malthouse / Will Smith
020 7353 4200
Notes to Editors
The Findel Group contains market leading businesses in the UK
home shopping and education supplies markets. It is primarily a
retailer and distributor, handling and supplying specialist
products manufactured by third parties.
The Group's activities are focused in two main operating
segments, together with a small overseas sourcing operation:
-- Express Gifts - one of the largest direct mail order businesses in the UK; and
-- Findel Education - the largest listed independent supplier of
resources and equipment (excluding information technology and
publishing) to schools in the UK.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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