Findel, the home shopping and education materials supplier, says restructuring costs and goodwill write-downs led to much heavier losses.
The company operates a portfolio of catalogue and online retailers, including Kitbag and 24studio. Around half their customers use credit agreements to make purchases.
In the 52 weeks ending on March 30th revenues were £537.8m, just short of market expectations of £540.26m, and up from £532.6m the year before.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The profit before tax figure is something of a moveable feast. Findel highlights a figure of £10.7m which is just above market expectations of £10.48m and up from an adjusted profit before tax of £7.0m the year before, but this excludes restructuring costs of £14.5m and a goodwill charge of £8.4m on the education business. These items led to a reported loss before tax of £12.1m, versus a loss of £1.4m in the previous year.
It's worth bearing in mind that Findel shares have lost 99.5% of their value in the last five years and in 2010 the group nearly went bust after breaching its banking covenants.
On the upside, core bank debt has reduced from £134.4m in the prior year to £131.8m by the end of March. Net debt increased from £227.8m to £230.7m.
Findel's take on its earning per share figure is 1.03p, better than expectations of 0.57p and up from 0.59p in the prior year, but when exceptional items are included that figure becomes a loss per share of 0.29p (2011: +1.04p).
Unsurprisingly, Findel won't be paying dividends any time soon.
Roger Siddle, the Chief Executive, said he was "pleased with the progress that has been made". Furthermore, the new financial year has got off to a decent start with group sales up by 6.5% year-on-year in the first eight weeks.
Siddle believes that the company's recent refinancing has given it ample breathing space to address the significant number of challenges facing the group. He claims that the company has eliminated all critical blockages in the supply chain, while credit insurance has largely been restored. Key investments in systems projects are all on track and target net debt levels have been achieved.
Investors weren't convinced; the stock was down 8.9% at 09:24.
BS
-
UK-US trade deal announced: US cuts tariffs on UK car imports to 10%Keir Starmer and Donald Trump have announced a UK-US trade deal, but the US president has refused to lift baseline tariffs on most UK goods. What does it mean for the UK?
-
How to use mid-caps to diversify from the USMedium sized companies are overlooked by investors but could offer an attractive ‘sweet spot’. We consider the case for mid-caps amid market volatility.
