Findel packs up its losses in its old Kitbag

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.

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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.

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