TIDMFDL
RNS Number : 4845Q
Findel PLC
30 November 2016
30 November 2016
Findel plc ("Findel" or "the Group")
Interim Results for the 27 weeks ended 30 September 2016
Findel, the online value retail and Education business, today
announces its Interim Results for the 27 week period ended 30
September 2016.
Financial Summary
Results from continuing H1 2016 H1 2015
operations
------------------------ ---------- ----------
Revenue GBP213.0m GBP191.4m
------------------------ ---------- ----------
Profit before tax* GBP1.9m GBP3.4m
------------------------ ---------- ----------
Loss before tax (GBP0.6m) (GBP0.6m)
------------------------ ---------- ----------
Core net debt** GBP94.5m GBP95.6m
------------------------ ---------- ----------
Net assets GBP68.7m GBP80.4m
------------------------ ---------- ----------
* before exceptional items and revaluation of forward foreign
exchange contracts (refer to Group Financial Results section for
analysis)
** net debt excluding the securitisation facility relating to
Express Gifts receivables and finance leases (see note 9 for
details)
Highlights
-- Good sales performance in the first-half with Group
like-for-like revenue up 6.5% on prior year (reported revenue up
11.3%)
-- Continued strong performance from Express Gifts, our largest
business, with first-half like-for-like product revenue up 12.0%
(reported revenue up 18.7%)
o Full-year recruitment target of 100,000 additional customers
already achieved; with 12% increase in active customer base
o Sales from new and established customers continuing to
generate strong growth during the peak Christmas trading period;
orders during Black Friday week up 36%, a record week for the
business
o Full FCA licence approval received in October
-- Findel Education seeing improving trends in overall sales as the year progresses
o Total revenue for first-half on a like-for-like basis down by
5.4% (on a reported basis down by 4.2%); Q2 like-for-like revenue
down by 3%
o Classroom and Specialist brands showing year-on-year growth in
Q2 and market share growth
o Market pricing conditions for our School brands remain
challenging, with first-half revenue decline of 10%
o Warehouse consolidation successfully completed; will provide
significant uplift to the profitability of the division for FY2018
and beyond
-- Further modest reduction in core net debt** despite strong growth at Express Gifts
o Express Gifts securitisation facility increased to GBP155m, up
from GBP145m, to accommodate future sales and receivables
growth
Outlook
-- FY2017: On track to deliver a full year performance in line with expectations
o Express Gifts: Sales in Christmas trading period in line with
first-half rate of growth
o Education: Classroom and Specialist brands continue to show
year-on-year growth
-- FY2018:
o Further progress in sales and customer recruitment by Express
Gifts expected to broadly offset the impact of currency movements
and increase in marketing investment
o Education anticipated to deliver an increase in profitability
as a result of initiatives already undertaken
David Sugden, Executive Chairman, commented:
"We are pleased to report a half of significant progress across
the Group. The strong trading performance of Express Gifts is
extremely encouraging. It represents continued delivery against our
digital strategy and gives us confidence to further increase
investment in marketing and customer recruitment. The new
management team in Education are also making good progress against
a challenging market backdrop. Looking ahead, we remain confident
that the ongoing investment in both our businesses will deliver
improved returns for shareholders."
* before exceptional items and revaluation of forward foreign
exchange contracts (refer to Group Financial Results section for
analysis)
** net debt excluding the securitisation facility relating to
Express Gifts receivables and finance leases (see note 9 for
details)
References to "like-for-like" mean a comparison between adjusted
figures showing equivalent 26-week calendar periods from each
reporting period. A reconciliation to reported figures is presented
on page 6. The current financial year will be a 53-week period
ending on 31 March 2017.
Enquiries
Findel plc 0161 303 3465
David Sugden, Executive Chairman
Tim Kowalski, Group Finance Director
Tulchan Communications 020 7353 4200
Stephen Malthouse
Will Smith
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 continuing 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.
INTERIM MANAGEMENT REPORT
Summary
We are pleased with the overall performance of the group in the
first-half of the year. Revenue for the period was strongly ahead,
up by 6.5% on a like-for-like basis (up 11.3% on a reported basis).
Pre-tax profit* was GBP1.9m, lower than the prior year result of
GBP3.4m, reflecting an increase in profits from Express Gifts and
market conditions for Findel Education remaining challenging.
The performance during the peak trading periods for each
business has been very encouraging and underpins our confidence in
the group's ability to deliver full-year results in line with
expectations.
Express Gifts
Express Gifts is our core online value retail business. With
over 1.5m customers, it is one of the largest direct mail order
businesses in the UK, offering a broad range of home and leisure
items, clothing, toys and gifts via catalogue and online, together
with a leading personalisation offer. In order to build upon
Express Gifts' market leading position, the business has been
successfully focusing on accelerating sales growth and growing its
customer base through a number of strategic initiatives.
At the start of the calendar year, the business set out with the
aim of recruiting 100,000 additional customers for the year by
focusing its core value proposition. Much of the additional
recruitment activity has been based around new TV and digital
campaigns that highlight particularly good-value products and
direct customers towards the www.studio.co.uk website. We are
therefore very pleased to report that the recruitment objective has
already been passed, and that retention levels from existing
customers have also increased throughout the year.
This investment together with the ongoing improvements in our
online offering has generated product revenue growth in H1 on a
like-for-like basis of 12.0% (reported basis: 18.7%), a rate which
has been sustained as the business has moved into its peak trading
period ahead of Christmas.
Financial services revenues increased by 11.3% on a like-for
like basis (reported basis: 17.9%) in the first-half of the year,
driven by the growth in balances resulting from increased product
sales and the roll-out of risk-based pricing. The higher level of
customer recruitment seen during the early months of the year,
together with refinements to the management of the credit book and
changes to the timing and extent of debt sales, has increased bad
debt charges compared to the first half of last year. The project
to introduce a new financial services operating platform is ongoing
and is expected to be completed next summer, ahead of the peak
trading season.
Placing the customer at the heart of the business is key to its
long-term success. Therefore, in addition to a series of new
features on the websites that were launched at the start of the
year, we have established our own call centre operation in the
Philippines to ensure that the business has sufficient capacity to
manage customer enquiries throughout the peak trading season. This
facility, which was opened at the start of the year, is operating
well and is contributing to a significant reduction in lost sales
compared to previous years.
A significant level of work has been undertaken over the last
two years to improve the governance and effectiveness of controls
and risk management in the business. We were therefore very pleased
to receive confirmation from the FCA that our application for full
consumer credit authorisation was approved in October.
Overall, the business produced an operating profit* for H1 of
GBP5.3m, 7.2% ahead of the prior year, and is well positioned for
the remainder of the year.
With the response to our investment activity exceeding our
expectations, we have decided to increase the investment in both
customer recruitment and customer-facing systems throughout the
remainder of this year and next to support further sustainable
sales growth.
Looking ahead to FY2018, sales growth, together with initiatives
on pricing, sourcing, and efficiencies, will help to mitigate
against adverse currency movements.
Findel Education
Findel Education, one of the leading suppliers of
resources/equipment to schools in the UK and overseas, has
performed well in the first-half of the year increasing its market
share in a very challenging market.
The focus for the business over the last 18 months has been to
arrest the decline in market share and return the business to
market share growth. This objective has been achieved for our
Classroom and Specialist brands with both recording sales increases
in the second quarter, which is the business' peak period. The more
commodity based School brands are still recording declining sales
and further actions are underway to help these brands return to
market share growth.
Whilst overall first-half revenue declined year-on-year, the
rate of decline narrowed as the period progressed. Overall,
adjusting for the revised timing of sales under the Sainsbury's
Active Kids contract most of which will now occur in Q3 and the
additional week, total revenues in the first-half are down by 5.4%
(on a reported basis down by 4.2%) with revenues in the second
quarter down by c.3%.
The operating profit* for H1 was GBP2.1m lower than prior year
at GBP1.6m. Around half of this decline is attributable to the
reduction in revenue and the timing of Sainsbury's revenues with
the balance reflecting the investments that we are making in
repositioning the business.
The warehouse consolidation project has now been successfully
completed and is performing to plan. It will provide a significant
uplift to the profitability of the division for FY2018 and beyond.
Expectations for the division for the current year remain
unchanged.
Exceptional items
As highlighted in our 2016 Annual Report, we had set aside a
provision of GBP14.4m for customer redress and refunds in respect
of flawed financial services products, based upon estimates and
assumptions that were subject to change. Since then we have
undertaken a pilot-scale contact programme for affected customers.
Based on the findings from that programme a revised scheme of
redress has now been proposed to and accepted by the FCA. A more
informed analysis of the likely cost of this scheme indicates that
an additional GBP3.3m charge will be required, although this
remains an estimate ahead of rolling out the contact programme in
the coming months.
The Board announced in July 2016 that it had received a proposal
from Schroders plc, on behalf of Sports Direct International plc
(SDI), to seek to appoint Mr Michael Ashley as Chairman of the
Company in succession to David Sugden, who had indicated his
intention to step down. Exceptional advisory costs totalling
GBP0.7m have been incurred in the period to 30 September 2016 in
dealing with this proposal and other related matters.
A credit of GBP0.1m has also been recorded in respect of the
recovery of amounts due from the group's former subsidiary Kleeneze
Limited, which were previously written off as unrecoverable.
Update on leadership
Further to the announcement last month, the process to appoint
an independent Executive Chairman to replace David Sugden continues
and an update will be provided early in the New Year.
Outlook
The Group remains on track to deliver a full year performance in
line with expectations.
Looking ahead to FY2018, the success of the marketing campaigns
in Express Gifts, together with the strength of its offer,
underpins our confidence to invest in promoting continued strong
sales growth. We will be increasing our investment in this area as
we look to further grow the customer base. Whilst this, together
with currency headwinds, is expected to lead to profits remaining
broadly unchanged next year, it will strengthen the medium-term
prospects for Express Gifts.
The successful completion of the warehouse consolidation project
for Findel Education will provide a strong increase to its
profitability in future years. Market conditions are unlikely to
become easier in the near term and the business will therefore
continue to focus on its increasingly successful actions to
increase market share to provide profit growth in FY2018 and
beyond.
* before exceptional items and revaluation of forward foreign
exchange contracts (refer to Group Financial Results section for
analysis)
** net debt excluding the securitisation facility relating to
Express Gifts receivables and finance leases (see note 9 for
details)
References to "like-for-like" mean a comparison between adjusted
figures showing equivalent 26-week calendar periods from each
reporting period. A reconciliation to reported figures is presented
on page 6. The current financial year will be a 53-week period
ending on 31 March 2017.
GROUP FINANCIAL RESULTS
The nature of the businesses within the Findel Group mean that
profits have shown, and will continue to show, a significant
seasonal bias with the majority of profit being earned in the
second half.
Revenue
The current financial year will be a 53-week period ending on 31
March 2017. The first-half of the year is therefore a 27-week
period that ended on 30 September 2016. Revenues from the
Sainsbury's Active Kids scheme in Findel Education are normally
received during the first-half of the year. However, due to
one-time operational changes, most of these revenues will be seen
in the second half of this year.
In order to provide a reasonable method of comparison between
equivalent 26-week calendar periods from each reporting period
("like-for-like"), the reported figures for both the periods ended
30 September 2016 and 25 September 2015 have been adjusted. The
adjustments made to reported figures for the period ended 30
September 2016 have the effect of removing the first week of the 27
week reporting period, whilst the adjustment made to the reported
figures for the period ended 25 September 2015 has the effect of
removing the first week of the 26 week reporting period and adding
the impact of the first week of trading in H2 of FY2016. The
adjustments made to the prior year figures also remove the impact
of the timing of sales in respect of the Sainsbury's "Active Kids"
scheme. The adjustments are summarised as follows:
Period ended 30 September 2016
Express Gifts Findel Major Overseas Total
Education divisions sourcing
---------------------------------
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Sales Financial Total
of goods services^
Reported revenue
- 27 weeks 110,363 47,384 157,747 53,548 211,295 1,754 213,049
Remove week
1 (2,195) (1,901) (4,096) (499) (4,595) - (4,595)
---------- ----------- -------- ----------- ----------- ---------- --------
Like-for-like
revenue 108,168 45,483 153,651 53,049 206,700 1,754 208,454
---------- ----------- -------- ----------- ----------- ---------- --------
^includes rendering of services and fees and interest.
Period ended 25 September 2015
Express Gifts Findel Major Overseas Total
Education divisions sourcing
---------------------------------
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Sales Financial Total
of goods services^
Reported revenue
- 26 weeks 92,963 40,202 133,165 55,889 189,054 2,307 191,361
Remove week
1/add week 27 3,614 678 4,292 1,129 5,421 (33) 5,388
Adjust for "Active
Kids" sales - - - (943) (943) (943)
---------- ----------- -------- ----------- ----------- ---------- --------
Like-for-like
revenue 96,577 40,880 137,457 56,075 193,532 2,274 195,806
---------- ----------- -------- ----------- ----------- ---------- --------
^includes rendering of services and fees and interest.
The group's revenue performance vs. the equivalent period in the
prior year on both a like-for-like and reported basis is as
follows:
LIKE-FOR-LIKE BASIS 2016 2015 Change Change
GBP000 GBP000 GBP000 %
Sales of goods 108,168 96,577 11,591 12.0%
Financial services^ 45,483 40,880 4,603 11.3%
Express Gifts 153,651 137,457 16,194 11.8%
--------------------- -------- -------- -------- --------
Findel Education 53,049 56,075 (3,026) (5.4%)
Major divisions 206,700 193,532 13,168 6.8%
Overseas sourcing 1,754 2,274 (520) (22.9%)
-------- -------- -------- --------
Group revenue 208,454 195,806 12,648 6.5%
-------- -------- -------- --------
^includes rendering of services and fees and interest.
REPORTED BASIS 2016 2015 Change Change
GBP000 GBP000 GBP000 %
Sales of goods 110,363 92,963 17,400 18.7%
Financial services^ 47,384 40,202 7,182 17.9%
Express Gifts 157,747 133,165 24,582 18.5%
---------------------- -------- -------- -------- --------
Findel Education 53,548 55,889 (2,341) (4.2%)
Major divisions 211,295 189,054 22,241 11.8%
Overseas sourcing 1,754 2,307 (553) (24.0%)
-------- -------- -------- --------
Group revenue 213,049 191,361 21,688 11.3%
-------- -------- -------- --------
^includes rendering of services and fees and interest.
Summary income statement
2016 2015 Change
GBP000 GBP000 GBP000
Express Gifts 5,254 4,900 354
Findel Education 1,558 3,619 (2,061)
Major divisions 6,812 8,519 (1,707)
Overseas sourcing (354) (76) (278)
---------------------- -------- -------- --------
Group operating
profit* 6,458 8,443 (1,985)
Net finance costs* (4,588) (5,057) 469
Profit before tax* 1,870 3,386 (1,516)
FX-hedge revaluation 1,390 - 1,390
Exceptional items (3,822) (3,939) 117
Loss before tax (562) (553) (9)
-------- -------- --------
* before exceptional items and revaluation of forward foreign exchange contracts
Borrowings and finance costs
The seasonality in the group's businesses mean that core net
debt** is at its peak at the half-year point. The core net debt**
at September 2016 stood at GBP94.5m, GBP1.1m lower than at
September 2015 despite the strong growth in working capital
requirements for Express Gifts additional recruitment.
Total net debt at the end of September 2016 was GBP226.7m
(September 2015: GBP217.6m) with securitisation borrowings GBP8.3m
higher at GBP130.3m (2015: GBP122.0m) due to Express Gifts strong
receivables growth and new finance leases totalling GBP1.9m
relating to the warehouse consolidation project for Findel
Education.
Finance costs totalling GBP4.6m were incurred in the first-half
of the year, some GBP0.5m lower than the equivalent period in
FY2016 despite the higher total borrowings.
Foreign exchange contracts
The group amended its policy on foreign exchange risk management
at the start of 2016 by moving away from an approach that only
covered exposures occurring within the current financial year,
instead moving to securing exposures on a rolling 12-month
basis.
This new approach has led to a mark to market gain of GBP1.4m on
forward contracts outstanding at 30 September 2016, which has been
presented separately in the consolidated income statement. At the
end of September 2016, derivative assets of GBP1.4m were recorded
in the consolidated balance sheet in relation to forward foreign
exchange contracts.
Exceptional items
As highlighted in our 2016 Annual Report, we had set aside a
provision of GBP14.4m for customer redress and refunds in respect
of flawed financial services products, based upon estimates and
assumptions that were subject to change. Since then we have
undertaken a pilot-scale contact programme for affected customers.
Based on the findings from that programme a revised scheme of
redress has now been proposed to and accepted by the FCA. A more
informed analysis of the likely cost of this scheme indicates that
an additional GBP3.3m charge will be required, although this
remains an estimate ahead of rolling out the contact programme in
the coming months.
The Board announced in July 2016 that it had received a proposal
from Schroders plc, on behalf of Sports Direct International plc
(SDI), to seek to appoint Mr Michael Ashley as Chairman of the
Company in succession to David Sugden, who had indicated his
intention to step down. Exceptional advisory costs totalling
GBP0.7m have been incurred in the period to 30 September 2016 in
dealing with this proposal and other related matters.
A credit of GBP0.1m has also been recorded in respect of the
recovery of amounts due from the group's former subsidiary Kleeneze
Limited, which were previously written off as unrecoverable.
Taxation
The group recognised an income tax charge in respect of
continuing operations in the first-half of GBP0.7m (September 2015:
GBP 0.7m). The estimated effective tax rate for the full year,
excluding the impact of exceptional items is 21.1% (September 2015:
20.8%), which is slightly higher than the prevailing corporation
tax rate of 20%, owing to items of non-taxable expenditure and a
reduction in the rate at which deferred tax assets are recognised
from 18% to 17%.
Balance sheet
Net assets at September 2016 stood at GBP68.7m, compared to
GBP80.4m at September 2015.
The group's pension deficit measured under IAS 19 has increased
from a low of GBP2.3m at March 2016 to GBP12.8m primarily due to a
decrease in bond yields.
Findel plc
Group Financial Information
Condensed Consolidated Income Statement
27 week period ended 30 September 2016
Before
exceptional Exceptional
items items Total
GBP000 GBP000 GBP000
-------------------------------------- ------------ ----------- ---------
Continuing operations
Revenue 213,049 - 213,049
Cost of sales (109,083) - (109,083)
Gross profit 103,966 - 103,966
-------------------------------------- ------------ ----------- ---------
Trading costs (96,118) (3,822) (99,940)
-------------------------------------- ------------ ----------- ---------
Analysis of operating profit/(loss):
- EBITDA* 11,445 (3,822) 7,623
- Depreciation and amortisation (4,987) - (4,987)
-------------------------------------- ------------ ----------- ---------
Operating profit/(loss) before
fair value movements on derivative
financial instruments 6,458 (3,822) 2,636
Fair value movements on derivative
financial instruments 1,390 - 1,390
-------------------------------------- ------------ ----------- ---------
Operating profit/(loss) 7,848 (3,822) 4,026
-------------------------------------- ------------ ----------- ---------
Finance costs (4,588) - (4,588)
-------------------------------------- ------------ ----------- ---------
Profit/(loss) before tax 3,260 (3,822) (562)
Tax (expense)/income (686) 806 120
Profit/(loss) for the period 2,574 (3,016) (442)
-------------------------------------- ------------ ----------- ---------
Discontinued operation
Result from discontinued operation,
net of tax - - -
Profit/(loss) for the period 2,574 (3,016) (442)
-------------------------------------- ------------ ----------- ---------
Loss per ordinary share
from continuing operations
Basic (0.51)p
Diluted (0.51)p
from discontinued operation
Basic -
Diluted -
total attributable to
ordinary shareholders
Basic (0.51)p
Diluted (0.51)p
*Earnings before interest, taxation, depreciation, amortisation
and fair value movements on derivative financial instruments.
Condensed Consolidated Income Statement
26 week period ended 25 September 2015
Before
Exceptional Exceptional
items items Total
GBP000 GBP000 GBP000
------------------------------------- ------------ ----------- --------
Continuing operations
Revenue 191,361 - 191,361
Cost of sales (98,672) - (98,672)
Gross profit 92,689 - 92,689
--------------------------------------- ------------ ----------- --------
Trading costs (84,246) (3,871) (88,117)
--------------------------------------- ------------ ----------- --------
Analysis of operating profit/(loss):
- EBITDA* 11,761 (3,871) 7,890
- Depreciation and amortisation (3,318) - (3,318)
--------------------------------------- ------------ ----------- --------
Operating profit/(loss) before
fair value movements on derivative
financial instruments 8,443 (3,871) 4,572
Fair value movements on derivative
financial instruments - - -
Operating profit/(loss) 8,443 (3,871) 4,572
Finance costs (5,057) (68) (5,125)
--------------------------------------- ------------ ----------- --------
Profit/(loss) before tax 3,386 (3,939) (553)
Tax (expense)/income (705) 821 116
Profit/(loss) for the period 2,681 (3,118) (437)
--------------------------------------- ------------ ----------- --------
Discontinued operation
Loss from discontinued operation,
net of tax (3,478) (243) (3,721)
Loss for the period (797) (3,361) (4,158)
--------------------------------------- ------------ ----------- --------
Loss per ordinary share
from continuing operations
Basic (0.51)p
Diluted (0.51)p
from discontinued operations
Basic (4.33)p
Diluted (4.33)p
total attributable to ordinary
shareholders
Basic (4.84)p
Diluted (4.84)p
*Earnings before interest, taxation, depreciation, amortisation
and fair value movements on derivative financial instruments.
Condensed Consolidated Income Statement
52 week period ended 25 March 2016
Before
Exceptional Exceptional
items items Total
GBP000 GBP000 GBP000
------------------------------------- ----------- ----------- ---------
Continuing operations
Revenue 410,601 - 410,601
Cost of sales (216,446) - (216,446)
Gross profit 194,155 - 194,155
-------------------------------------- ----------- ----------- ---------
Trading costs (159,478) (25,458) (184,936)
Analysis of operating profit/(loss):
- EBITDA* 41,519 (25,458) 16,061
- Depreciation and amortisation (6,842) - (6,842)
Operating profit/(loss) before
fair value movements on derivative
financial instruments 34,677 (25,458) 9,219
Fair value movements on derivative
financial instruments - - -
Operating profit/(loss) 34,677 (25,458) 9,219
Finance costs (9,901) (998) (10,899)
-------------------------------------- ----------- ----------- ---------
Profit/(loss) before tax 24,776 (26,456) (1,680)
Tax (expense)/income (5,230) 5,321 91
Profit/(loss) for the period 19,546 (21,135) (1,589)
-------------------------------------- ----------- ----------- ---------
Discontinued operation
Loss from discontinued operation,
net of tax (3,268) (5,339) (8,607)
Profit/(loss) for the year 16,278 (26,474) (10,196)
-------------------------------------- ----------- ----------- ---------
Loss per ordinary share
from continuing operations
Basic (1.85)p
Diluted (1.85)p
from discontinued operation
Basic (10.00)p
Diluted (10.00)p
total attributable to ordinary
shareholders
Basic (11.85)p
Diluted (11.85)p
*Earnings before interest, taxation, depreciation, amortisation
and fair value movements on derivative financial instruments.
Condensed Consolidated Statement of Comprehensive Income
27 week period ended 30 September 2016
27 weeks 26 weeks 52 weeks
to 30.9.2016 to 25.9.2015 to 25.3.2016
GBP000 GBP000 GBP000
--------------------------------- ------------- ------------- -------------
Loss for the period (442) (4,158) (10,196)
Other Comprehensive Income
Items that may be reclassified
to profit or loss
Cash flow hedges (60) - 42
Currency translation (loss)/gain
arising on consolidation (73) (63) 213
--------------------------------- ------------- ------------- -------------
(133) (63) 255
--------------------------------- ------------- ------------- -------------
Items that will not subsequently
be reclassified to profit
and loss
Remeasurements of defined
benefit pension scheme (11,564) 1,713 7,001
Tax relating to components
of comprehensive income 1,966 (216) (1,134)
--------------------------------- ------------- ------------- -------------
(9,598) 1,497 5,867
--------------------------------- ------------- ------------- -------------
Total comprehensive loss
for period (10,173) (2,724) (4,074)
--------------------------------- ------------- ------------- -------------
The total comprehensive loss for the period is attributable to
the equity shareholders of the parent company Findel plc.
Condensed Consolidated Balance Sheet
At 30 September 2016
30.9.2016 25.9.2015 25.3.2016
GBP000 GBP000 GBP000
---------------------------- --------- --------- ---------
Non-current assets
Goodwill 16,691 16,691 16,691
Other intangible assets 29,964 29,453 30,631
Property, plant and
equipment 42,993 35,720 41,423
Deferred tax assets 8,028 9,957 4,182
97,676 91,821 92,927
---------------------------- --------- --------- ---------
Current assets
Inventories 74,088 70,640 53,472
Trade and other receivables 241,549 230,727 229,848
Derivative financial
instruments 1,390 - -
Cash and cash equivalents 19,082 36,047 34,405
Current tax assets 1,525 - 3,554
Assets held for sale - 31,858 -
----------------------------- --------- --------- ---------
337,634 369,272 321,279
---------------------------- --------- --------- ---------
Total assets 435,310 461,093 414,206
----------------------------- --------- --------- ---------
Current liabilities
Trade and other payables (81,674) (88,634) (58,175)
Current tax liabilities - (3,841) -
Derivative financial
instruments - (75) -
Obligations under finance
leases (532) - (518)
Provisions (18,791) (4,609) (17,498)
Liabilities held for
sale - (28,371) -
----------------------------- --------- --------- ---------
(100,997) (125,530) (76,191)
---------------------------- --------- --------- ---------
Non-current liabilities
Bank loans (243,908) (245,395) (248,911)
Obligations under finance
leases (1,344) - (1,658)
Provisions (7,482) (900) (6,277)
Retirement benefit
obligation (12,846) (8,914) (2,294)
(265,580) (255,209) (259,140)
---------------------------- --------- --------- ---------
Total liabilities (366,577) (380,739) (335,331)
----------------------------- --------- --------- ---------
Net assets 68,733 80,354 78,875
----------------------------- --------- --------- ---------
Equity
Share capital 48,644 126,442 48,644
Capital redemption
reserve - 403 -
Share premium account - 92,954 -
Translation reserve 900 697 973
Hedging reserve (60) (42) -
Accumulated losses 19,249 (140,100) 29,258
Total equity 68,733 80,354 78,875
----------------------------- --------- --------- ---------
Condensed Consolidated Cash Flow Statement
27 week period ended 30 September 2016
27 weeks 26 weeks 52 weeks
to 30.9.2016 to 25.9.2015 to 25.3.2016
GBP000 GBP000 GBP000
-------------------------------------- ------------- ------------- -------------
Loss for the period (442) (4,158) (10,196)
Adjustments for:
Income tax (120) (895) (959)
Finance costs 4,588 5,125 10,899
Depreciation of property, plant
and equipment 4,074 2,872 5,812
Amortisation of intangible assets 913 1,348 2,537
Share-based payment expense 31 368 239
Loss on disposal of property,
plant and equipment 23 75 76
Loss on disposal of subsidiary - - 4,782
Fair value movements on financial
instruments plus premiums paid (1,480) - -
Defined benefit pension contributions (1,042) (1,000) (2,500)
Operating cash flows before
movements in working capital 6,545 3,735 10,690
Increase in inventories (20,616) (24,265) (6,846)
Increase in receivables (14,019) (11,440) (5,965)
Increase/(decrease) in payables 23,018 35,204 (5,133)
Increase/(decrease) in provisions 2,498 (1,808) 16,143
--------------------------------------- ------------- ------------- -------------
Cash (used in)/ generated from
operations (2,574) 1,426 8,889
Income taxes refunded/(paid) 269 (798) (2,494)
Interest paid (4,168) (4,851) (9,549)
Net cash from operating activities (6,473) (4,223) (3,154)
--------------------------------------- ------------- ------------- -------------
Investing activities
Interest received 2 - -
Proceeds on disposal of property,
plant and equipment 22 - -
Purchases of property, plant
and equipment and software and
IT development costs (5,927) (6,826) (15,940)
Sale of subsidiary (net of cash
held in subsidiary) 2,318 - 11,115
Net cash used in investing activities (3,585) (6,826) (4,825)
--------------------------------------- ------------- ------------- -------------
Financing activities
Repayment of amounts owing under
finance lease arrangements (299) - -
Bank loans repaid (6,434) (1,958) (5,334)
Securitisation loan drawn 1,431 2,332 9,224
Net cash from financing activities (5,302) 374 3,890
--------------------------------------- ------------- ------------- -------------
Net decrease in cash and cash
equivalents (15,360) (10,675) (4,089)
Cash and cash equivalents at
the beginning of the period 34,405 38,470 38,470
Effect of foreign exchange rate
changes 37 (11) 24
Cash and cash equivalents at
the end of the period 19,082 27,784* 34,405
--------------------------------------- ------------- ------------- -------------
*Includes an overdraft balance of GBP8,263,000 in Kitbag
Limited, disclosed within liabilities held for sale at 25 September
2015.
Condensed Consolidated Statement of Changes in Equity
27 week period ended 30 September 2016
Retained
Capital Share earnings/
Share redemption premium Translation Hedging (accumulated Total
capital reserve account reserve reserve losses) equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- -------- ----------- -------- ----------- -------- ------------- --------
At 25 March 2016 48,644 - - 973 - 29,258 78,875
Total comprehensive
loss - - - (73) (60) (10,040) (10,173)
Share-based payments - - - - - 31 31
--------------------- -------- ----------- -------- ----------- -------- ------------- --------
At 30 September
2016 48,644 - - 900 (60) 19,249 68,733
--------------------- -------- ----------- -------- ----------- -------- ------------- --------
Retained
Capital Share earnings/
Share redemption premium Translation Hedging (accumulated Total
capital reserve account reserve reserve losses) equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- -------- ----------- -------- ----------- -------- ------------- -------
At 27 March 2015 126,442 403 92,954 760 (42) (137,807) 82,710
Total comprehensive
loss - - - (63) - (2,661) (2,724)
Share-based payments - - - - - 368 368
At 25 September
2015 126,442 403 92,954 697 (42) (140,100) 80,354
--------------------- -------- ----------- -------- ----------- -------- ------------- -------
Retained
Capital Share earnings/
Share redemption premium Translation Hedging (accumulated Total
capital reserve account reserve reserve losses) equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- -------- ----------- -------- ----------- -------- ------------- -------
At 27 March 2015 126,442 403 92,954 760 (42) (137,807) 82,710
Total comprehensive
loss - - - 213 42 (4,329) (4,074)
Capital reduction (77,798) (403) (92,954) - - 171,155 -
Share-based payments - - - - - 239 239
--------------------- -------- ----------- -------- ----------- -------- ------------- -------
At 25 March 2016 48,644 - - 973 - 29,258 78,875
--------------------- -------- ----------- -------- ----------- -------- ------------- -------
The total equity is attributable to the equity shareholders of
the parent company Findel plc.
Notes to the Condensed Consolidated Financial Statements
1. General Information
The condensed consolidated financial statements have been
approved by the board on 29 November 2016.
Statement of compliance
These condensed consolidated interim financial statements have
been prepared in accordance with IAS 34 Interim Financial Reporting
as adopted by the European Union ("EU") and the Disclosure Guidance
and Transparency Rules of the United Kingdom's Financial Conduct
Authority. As required by the latter, the interim financial
statements have been prepared applying the accounting policies and
presentation that were applied in the company's published
consolidated financial statements for the 52 weeks ended 25 March
2016. They do not include all the information required for full
annual financial statements, and should be read in conjunction with
the group's consolidated financial statements as at and for the 52
weeks ended 25 March 2016.
The financial information for the period ended 25 March 2016 is
not the company's statutory accounts for that financial year. Those
accounts which were prepared under IFRS as adopted by the EU
("adopted IFRS") have been reported on by the company's auditor and
delivered to the Registrar of Companies. The report of the auditor
was (i) unqualified, (ii) did not include a reference to any
matters to which the auditor draws attention by way of emphasis
without qualifying their report, and (iii) did not contain a
statement under sections 498(2) or (3) of the Companies Act
2006.
Going concern basis
In determining whether the group's interim financial statements
for the period ended 30 September 2016 can be prepared on a going
concern basis, the directors considered all factors likely to
affect its future development, performance and its financial
position, including cash flows, liquidity position and borrowing
facilities and the risks and uncertainties relating to its business
activities in the current economic climate. The financial position
of the group, its cash flows, liquidity position and borrowing
facilities and the key risks and uncertainties are set out in
further detail above in the Finance Director's Review on pages 20
to 24 of the group's annual report and accounts for the 52 week
period ended 25 March 2016.
The directors have reviewed the trading and cash flow forecasts
for the period to December 2017 as part of their going concern
assessment, including reasonable downside sensitivities which take
into account the uncertainties in the current operating environment
including amongst other matters demand for the group's products,
its available financing facilities, and regulatory licensing and
compliance. Although at certain times the level of headroom reduces
to a level which is less than the directors would regard as
desirable in the long term, the directors believe it to be
sufficient and have identified controllable mitigating actions that
could be implemented if required. The group's banking facilities
mature in December 2019.
Taking into account the above uncertainties and circumstances,
the directors formed a judgement that there is a reasonable
expectation that the group has adequate resources to continue in
operational existence for a period of at least 12 months.
Accordingly, they continue to adopt the going concern basis in
preparing the group's interim consolidated financial
statements.
Risks and uncertainties
The principal risks and uncertainties which could impact the
group's long-term performance remain those detailed on pages 22 to
23 of the group's annual report and accounts for the 52 week period
ended 25 March 2016, a copy of which is available on the group's
website, www.findel.co.uk. No new risks have been identified.
The risks detailed in the annual report and accounts remain
valid as regards their potential to impact the group during the
second half of the current financial year. The group has a
comprehensive system of risk management installed within all parts
of its business to mitigate these risks as far as is possible.
Seasonality
The nature of the businesses within the Findel group mean that
profits have shown, and will continue to show, a significant
seasonal bias with the majority of profit being earned in the
second half.
2. Accounting Policies
As required by the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority, this condensed
set of financial statements has been prepared applying the same
accounting policies and computation methods that were applied in
the preparation of the company's published consolidated financial
statements for the year ended 25 March 2016.
Estimates
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing the interim financial statements, the significant
judgements made by management in applying the group's accounting
policies and key sources of estimation uncertainty were the same as
those that applied to the consolidated financial statements for the
year ended 25 March 2016 with the exception of the following:
Provision for financial services redress and refunds
As required by IAS 37 Provisions, Contingent Liabilities and
Contingent Assets, management has reviewed the provision created at
25 March 2016 in respect of customer redress and refunds in respect
of flawed financial services products. On the basis of the results
of a pilot-scale contact programme for affected customers conducted
during the current financial reporting period, management has
revised its best estimate of the expenditure required to settle the
present obligation and has therefore recorded an increase in the
amount provided of GBP3.3m.
3. Trading costs
An analysis of the group's trading costs is as follows:
27 weeks
to 30
September 26 weeks to 25 September 52 weeks to 25 March
2016 2015 2016
---------- --------------------------------- ---------------------------------
Continuing Continuing Discontinued Continuing Discontinued
operations operations operation Total operations operations Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- ---------- ---------- ------------ ------- ---------- ------------ -------
Selling and
distribution
costs:
- Before exceptional
items 61,196 51,847 4,003 55,850 96,822 7,103 103,925
- Exceptional
items - - - - - - -
Administrative
expenses:
- Before exceptional
items 34,922 32,399 12,899 45,298 62,656 22,542 85,198
- Exceptional
items 3,822 3,871 300 4,171 25,458 5,480 30,938
99,940 88,117 17,202 105,319 184,936 35,125 220,061
--------------------- ---------- ---------- ------------ ------- ---------- ------------ -------
4. Segmental analysis
27 weeks to 30 September 2016
Revenue Continuing operations
Express Findel Overseas Total
Gifts Education sourcing
GBP000 GBP000 GBP000 GBP000
----------------------- -------- ----------- ---------- --------
Sales of goods 110,363 53,548 1,754 165,665
Rendering of services
and fees 7,642 - - 7,642
Interest 39,742 - - 39,742
----------------------- -------- ----------- ---------- --------
Reportable segment
revenue 157,747 53,548 1,754 213,049
----------------------- -------- ----------- ---------- --------
Loss after tax
-------
Continuing operations
Express Findel Overseas
Gifts Education Sourcing Total
GBP000 GBP000 GBP000 GBP000
--------------------- ---------- --------- -------
Reportable segment
results 5,254 1,558 (354) 6,458
------------------------- --------------------- ---------- --------- -------
Exceptional items (3,657) (165) -- (3,822)
------------------------- --------------------- ---------- --------- -------
Operating profit/(loss)
before fair value
movements
on derivative financial
instruments 1,597 1,393 (354) 2,636
------------------------- --------------------- ---------- ---------
Fair value movements
on derivative financial
instruments 1,390
------------------------- --------------------- ---------- --------- -------
Operating profit 4,026
------------------------- --------------------- ---------- --------- -------
Finance costs (4,588)
--------------------- ---------- --------- -------
Loss before tax (562)
Tax 120
------------------------- --------------------- ---------- --------- -------
Loss after tax (442)
------------------------- --------------------- ---------- --------- -------
26 weeks to 25 September 2015
Revenue
-------------------------- ------------ ---------------- ---------- -------- ------------------ -----------
Discontinued Group
Continuing operations operation
-------------------------- ---------------------------------------------------- ------------------ -----------
Express Findel Overseas Total Kitbag Total
Gifts Education sourcing
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------- ------------ ---------------- ---------- -------- ------------------ -----------
Sales of goods 92,963 55,889 2,307 151,159 33,268 184,427
Rendering
of services
and fees 7,716 - - 7,716 - 7,716
Interest 32,486 - - 32,486 - 32,486
-------------------------- ------------ ---------------- ---------- -------- ------------------ -----------
Reportable
segment revenue 133,165 55,889 2,307 191,361 33,268 224,629
-------------------------- ------------ ---------------- ---------- -------- ------------------ -----------
Loss after
tax
-------
Discontinued
Continuing operations operation Group
---------------------------------------
Express Findel Overseas
Gifts Education Sourcing Total Kitbag Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------- ---------- --------- -------
Reportable
segment results 4,900 3,619 (76) 8,443 (4,200) 4,243
------------------------ ------- ---------- --------- ------- ------------ -------
Exceptional
items (3,483) (388) - (3,871) (300) (4,171)
------------------------ ------- ---------- --------- ------- ------------ -------
Operating profit/loss)
before fair
value movements
on derivative
financial instruments 1,417 3,231 (76) 4,572 (4,500) 72
------------------------ ------- ---------- --------- ------- ------------ -------
Fair value - - -
movements on
derivative
financial instruments
------------------------ ------- ---------- --------- ------- ------------ -------
Operating profit/(loss) 4,572 (4,500) 72
------------------------ ------- ---------- --------- ------- ------------ -------
Finance costs
(includes GBP68,000
exceptional
finance costs) (5,125) - (5,125)
------- ---------- --------- -------
Loss before
tax (553) (4,500) (5,053)
Tax 116 779 895
------------------------ ------- ---------- --------- ------- ------------ -------
Loss after
tax (437) (3,721) (4,158)
------------------------ ------- ---------- --------- ------- ------------ -------
52 weeks ended 25 March 2016
Revenue
-------------------- -------- ----------- ---------- -------- ------------- --------
Discontinued
Continuing operations operation Group
Express Findel Overseas Total Kitbag Total
Gifts Education sourcing
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- -------- ----------- ---------- -------- ------------- --------
Sales of goods 224,880 94,401 3,222 322,503 63,958 386,461
Rendering of
services and
fees 16,369 - - 16,369 - 16,369
Interest 71,729 - - 71,729 - 71,729
Reportable segment
revenue 312,978 94,401 3,222 410,601 63,958 474,559
-------------------- -------- ----------- ---------- -------- ------------- --------
Loss after tax
--------
Discontinued
Continuing operations operation Group
Express Findel Overseas
Gifts Education Sourcing Total Kitbag Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Reportable segment
results 31,747 3,214 (284) 34,677 (3,995) 30,682
------------------------- -------- ---------- --------- -------- ------------ --------
Exceptional items (19,876) (5,582) - (25,458) (5,480) (30,938)
------------------------- -------- ---------- --------- -------- ------------ --------
Operating profit/loss)
before fair value
movements on derivative
financial instruments 11,871 (2,368) (284) 9,219 (9,475) (256)
------------------------- -------- ---------- --------- -------- ------------ --------
Fair value movements - - -
on derivative
financial instruments
------------------------- -------- ---------- --------- -------- ------------ --------
Operating profit/(loss) 9,219 (9,475) (256)
------------------------- -------- ---------- --------- -------- ------------ --------
Finance costs
(includes GBP998,000
exceptional finance
costs) (10,899) - (10,899)
Loss before tax (1,680) (9,475) (11,155)
Tax 91 868 959
------------------------- -------- ---------- --------- -------- ------------ --------
Loss after tax (1,589) (8,607) (10,196)
------------------------- -------- ---------- --------- -------- ------------ --------
5. Exceptional items
27 weeks 26 weeks 52 weeks
to 30.9.16 to 25.9.15 to 25.3.16
GBP000 GBP000 GBP000
-------------------------------------- ----------- ----------- -----------
Continuing operations
Exceptional trading costs
Express Gifts financial services
redress and refunds 3,300 2,000 14,388
Advisory costs relating to
shareholder proposal 655 - -
Amounts received in respect
of balances due from Kleeneze
Limited previously written
off as irrecoverable (133) - -
Amounts owing from Kleeneze
Limited written off as irrecoverable - 1,018 367
Receivables provisioning
in Express Gifts - - 4,300
Restructuring costs - 853 1,649
Onerous lease provisions - - 4,754
3,822 3,871 25,458
Exceptional financing costs
Debt refinancing costs - 68 998
3,822 3,939 26,456
----------- ----------- -----------
Tax credit in respect of
exceptional items (806) (821) (5,321)
----------- ----------- -----------
Total 3,016 3,118 21,135
----------- ----------- -----------
Discontinued operation
Restructuring costs - 300 698
Profit on disposal of subsidiary - - 4,782
- 300 5,480
----------- ----------- -----------
Tax credit in respect of
exceptional items - (57) (141)
----------- ----------- -----------
Total - 243 5,339
----------- ----------- -----------
Group total 3,016 3,361 26,474
----------- ----------- -----------
The directors consider that all items recorded within
exceptional items warrant separate presentation in the income
statement in order to fairly reflect the underlying performance of
the group.
As highlighted in our 2016 Annual Report, we had set aside a
provision of GBP14.4m for customer redress and refunds in respect
of flawed financial services products, based upon estimates and
assumptions that were subject to change. Since then we have
undertaken a pilot-scale contact programme for affected customers.
Based on the findings from that programme a revised scheme of
redress has now been proposed to and accepted by the FCA. A more
informed analysis of the likely cost of this scheme indicates that
an additional GBP3.3m charge will be required, although this
remains an estimate ahead of rolling out the contact programme in
the coming months.
The Board announced in July 2016 that it had received a proposal
from Schroders plc, on behalf of Sports Direct International plc
(SDI), to seek to appoint Mr Michael Ashley as Chairman of the
Company in succession to David Sugden, who had indicated his
intention to step down. Exceptional advisory costs totalling
GBP0.7m have been incurred in the period to 30 September 2016 in
dealing with this proposal and other related matters.
In the 52 week period ended 25 March 2016, costs of GBP367,000
(26 weeks ended 25 September 2015: GBP1,018,000) were incurred in
respect of the write-off of amounts due to Express Gifts from
Findel plc's former subsidiary Kleeneze Limited, which were
assessed as irrecoverable. GBP133,000 has been recovered during in
the 27 week period ended 30 September 2016 which has been credited
to income statement.
A charge of GBP4,300,000 was recorded in respect of receivables
provisioning in Express Gifts in the 52 week period ended 25 March
2016. Please refer to note 2 in the 2016 annual report and accounts
for further details.
In the 52 week period ended 25 March 2016 restructuring costs of
GBP1,649,000 (26 weeks ended 25 September: 2015: GBP853,000)
related to management changes, redundancies and costs associated
with the disposal of Kitbag Limited and the consolidation of Findel
Education's warehousing operations from two sites to one, as well
as organisational changes made within Express Gifts in relation to
compliance with new FCA requirements.
Costs of GBP4,754,000 were provided in the 52 week period ended
25 March 2016 in respect of an onerous lease provision arising as a
result of the consolidation of Findel Education's warehousing
operations from two sites to one.
Following the refinancing of the group's bank and securitisation
facilities in November 2015, costs of GBP998,000 were recognised in
the 52 week period ended 25 March 2016 (26 weeks ended 25
September: 2015: GBP68,000) in respect of the write-off of the
unamortised fees that were paid in respect of previous refinancing
exercises in May 2014 and January 2015.
6. Taxation
Income tax for the 27 week period ended 30 September 2016 is
based on an estimated effective tax rate for the full year of 21.3%
(26 week period ended 25 September 2015: 20.9% from continuing
operations), giving rise to a tax credit of GBP120,000 in the
period (26 week period ended 25 September 2015: GBP116,000 from
continuing operations). The estimated effective tax rate for the
full year, excluding the impact of exceptional items is 21.1% (26
week period ended 25 September 2015: 20.8% from continuing
operations).
7. (Loss)/earnings per share
Weighted average number
of shares
---------------------------------- -------------- ------------- -------------
27 weeks 26 weeks 52 weeks
to 30.9.2016 to 25.9.2015 to 25.3.2016
No. of No. of No. of
shares shares shares
----------------------------------- ------------- ------------- -------------
Ordinary shares in issue at
start of the period 86,442,534 86,442,534 86,442,534
Effect of own shares held (114,808) (581,878) (348,343)
----------------------------------- ------------- ------------- -------------
Weighted average number of shares
- basic 86,327,726 85,860,656 86,094,191
----------------------------------- ------------- ------------- -------------
From continuing operations
(Loss)/earnings attributable
to ordinary shareholders
-------------
27 weeks 26 weeks 52 weeks
to 30.9.2016 to 25.9.2015 to 25.3.2016
GBP000 GBP000 GBP000
-------------------------------------- ------------- ------------- -------------
Net loss attributable to equity
holders for the purposes of
basic loss per share (442) (437) (1,589)
-------------------------------------- ------------- ------------- -------------
Other exceptional items (net
of tax) (3,016) (3,050) (20,137)
Exceptional finance costs (net
of tax) - (68) (998)
-------------------------------------- ------------- ------------- -------------
Net profit attributable to equity
holders for the purpose of adjusted
earnings per share 2,574 2,681 19,546
-------------------------------------- ------------- ------------- -------------
(Loss)/earnings per share
-------------------------------------- ------------- ------------- -------------
Loss per share - basic (0.51)p (0.51)p (1.85)p
-------------------------------------- ------------- ------------- -------------
Earnings per share - adjusted*
basic 2.98p 3.12p 22.70p
-------------------------------------- ------------- ------------- -------------
Loss per share - diluted (0.51)p (0.51)p (1.85)p
-------------------------------------- ------------- ------------- -------------
Earnings per share - adjusted*
diluted 2.98p 3.12p 22.70p
-------------------------------------- ------------- ------------- -------------
From discontinued operation
Loss attributable to ordinary
shareholders
-------------
27 weeks 26 weeks 52 weeks
to 30.9.2016 to 25.9.2015 to 25.3.2016
GBP000 GBP000 GBP000
-------------------------------------- ------------- ------------- -------------
Net loss attributable to equity
holders for the purposes of
basic loss per share - (3,721) (8,607)
-------------------------------------- ------------- ------------- -------------
Other exceptional items (net
of tax) - (243) (5,339)
Exceptional finance costs (net
of tax) - - -
-------------------------------------- ------------- ------------- -------------
Net loss attributable to equity
holders for the purpose of adjusted
loss per share - (3,478) (3,268)
-------------------------------------- ------------- ------------- -------------
Loss per share
-------------------------------------- ------------- ------------- -------------
Loss per share - basic - (4.33)p (10.00)p
-------------------------------------- ------------- ------------- -------------
Loss per share - adjusted* basic - (4.05)p (3.80)p
-------------------------------------- ------------- ------------- -------------
Loss per share - diluted - (4.33)p (10.00)p
-------------------------------------- ------------- ------------- -------------
Loss per share - adjusted* diluted - (4.05)p (3.80)p
-------------------------------------- ------------- ------------- -------------
Total attributable to ordinary
shareholders
(Loss)/earnings attributable
to ordinary shareholders
-------------
27 weeks 26 weeks 52 weeks
to 30.9.2016 to 25.9.2015 to 25.3.2016
GBP000 GBP000 GBP000
------------------------------------ ------------- ------------- -------------
Net loss attributable to equity
holders for the purposes of
basic loss per share (442) (4,158) (10,196)
------------------------------------ ------------- ------------- -------------
Other exceptional items (net
of tax) (3,016) (3,293) (25,476)
Exceptional finance costs (net
of tax) - (68) (998)
------------------------------------ ------------- ------------- -------------
Net profit/(loss) attributable
to equity holders for the purpose
of adjusted earnings/(loss)
per share 2,574 (797) 16,278
------------------------------------ ------------- ------------- -------------
(Loss)/earnings per share
------------------------------------ ------------- ------------- -------------
Loss per share - basic (0.51)p (4.84)p (11.85)p
------------------------------------ ------------- ------------- -------------
Earnings per share - adjusted*
basic 2.98p (0.93)p 18.90p
------------------------------------ ------------- ------------- -------------
Loss per share - diluted (0.51)p (4.84)p (11.85)p
------------------------------------ ------------- ------------- -------------
Earnings/(loss) per share -
adjusted* diluted 2.98p (0.93)p 18.90p
------------------------------------ ------------- ------------- -------------
* Adjusted to remove the impact of exceptional items.
The (loss)/earnings per share attributable to convertible
ordinary shareholders is GBPnil.
8. Derivative financial instruments
At 30 September 2016 the group has outstanding derivative
financial instruments as follows:
Forward foreign exchange contracts
At 30 September 2016, the group was committed to forward foreign
exchange contracts with a notional sterling contract value of
GBP14,452,000. The fair value of the derivative asset recognised in
the balance sheet at 30 September 2016 in this regard was
GBP1,390,000. Changes in fair value of forward foreign exchange
contracts amounted to a credit of GBP1,390,000 in the period and
has been recorded within administrative expenses.
Interest rate cap contract
On 4 May 2016, the group entered into an interest rate cap
contract in order to restrict the LIBOR element of its interest
cost as follows
At 30 September 2016
Notional
borrowing Fair
amount Cap rate value
GBP000 GBP000
-------------- ---------- -------- ------
Maturing in 1
to 2 years 100,000 1.06% -
-------------- ---------- -------- ------
The GBP100,000,000 cap was designated as a cash flow hedge from
inception in accordance with IAS 39. The movement in the fair value
of these instruments during the period was as follows:
GBP000
-------------------------------------- ------
At 25 March 2016 -
Purchase of interest rate caps 90
Movement in fair value charged
to the hedging reserve (60)
Movement in fair value of ineffective
element charged to finance costs (30)
At 30 September 2016 -
-------------------------------------- ------
Basis for determining fair values
The fair value of both interest rate caps and forward foreign
exchange contracts is their market value at the balance sheet date.
Market values are based on the duration of the derivative
instrument together with the quoted market data including interest
rates, foreign exchange rates and market volatility at the balance
sheet date.
The financial instruments held by the group at the balance sheet
date are valued under the Level 2 measurement basis of the fair
value hierarchy: (i.e. based on inputs other than quoted prices
included within Level 1 that are observable for the asset or
liability, either directly (i.e., as prices) or indirectly (i.e.,
derived from prices)). There were no transfers between Level 1 and
Level 2 during the period.
9. Net debt
References to "net debt" and "core net debt" in the interim
management statement are derived as follows:
30.9.2016 25.9.2015 25.3.2016
GBP000 GBP000 GBP000
-------------------------- --------- --------- ---------
Non-current assets
Loans and borrowings (243,908) (245,395) (248,911)
Obligations under finance
leases (1,876) - (2,176)
Cash and cash equivalents 19,082 36,047 34,405
Overdraft disclosed
within liabilities
held for sale - (8,263) -
--------------------------- --------- --------- ---------
Net debt (226,702) (217,611) (216,682)
--------------------------- --------- --------- ---------
Add back
Obligations under finance
leases 1,876 - 2,176
Securitisation borrowing* 130,342 122,019 128,911
--------------------------- --------- --------- ---------
Core net debt (94,484) (95,592) (85,595)
--------------------------- --------- --------- ---------
*Disclosed within loans and borrowings in the consolidated
balance sheet.
Responsibility Statement
We confirm that to the best of our knowledge:
(a) the condensed consolidated financial statements have been
prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the European
Union;
(b) the interim management report and condensed consolidated
financial statements include a fair review of the information
required by:
(i) DTR 4.2.7R of the Disclosure Guidance and Transparency
Rules, being an indication of important events that have occurred
during the first six months of the financial year and their impact
on the condensed set of financial statements; and a description of
the principal risks and uncertainties for the remaining six months
of the year; and
(ii) DTR 4.2.8R of the Disclosure Guidance and Transparency
Rules, being related party transactions that have taken place in
the first six months of the current financial year and that have
materially affected the financial position or performance of the
entity during that period; and any changes in the related party
transactions described in the last annual report that could do
so.
By order of the Board
T J Kowalski P B Maudsley
Group Finance Director Managing Director, Home
Shopping
29 November 2016 29 November 2016
This document may contain forward looking statements. In
particular, but without limitation, nothing contained in this
document should be relied upon or construed as a promise or a
forecast, including any projection or management estimate, any
statements which contain the words "anticipate", "believe",
"intend", "estimate", "expect", "forecast" and words of a similar
meaning, reflect the management of the company's current beliefs
and expectations and are subject to risks and uncertainties that
may cause actual results to differ materially. Given these risks
and uncertainties, prospective investors are cautioned not to place
undue reliance on such statements. Any forward looking statements
speak only as at the date of this document, and except as required
by applicable law, Findel plc undertakes no obligation to update or
revise publicly any forward looking statements, whether as a result
of new information or otherwise.
Independent Review Report to Findel plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
27 week period ended 30 September 2016 which comprises the
condensed consolidated income statement, the condensed consolidated
statement of comprehensive income, the condensed consolidated
balance sheet, the condensed consolidated cash flow statement, the
condensed consolidated statement of changes in equity and the
related explanatory notes. We have read the other information
contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of
financial statements.
This report is made solely to the Company in accordance with the
terms of our engagement to assist the Company in meeting the
requirements of the Disclosure Guidance and Transparency Rules
("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Our review has been undertaken so that we might state to the
Company those matters we are required to state to it in this report
and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
Company for our review work, for this report, or for the
conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 1 the, annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the EU.
The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the 27 week period ended 30
September 2016 is not prepared, in all material respects, in
accordance with IAS 34 as adopted by the EU and the DTR of the UK
FCA.
Nicola Quayle for and on behalf of KPMG LLP
Chartered Accountants
1 St Peter's Square, Manchester, M2 3AE
29 November 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DBBDBBSDBGLC
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