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Findel out of the woods

RESULTS: There's more work to be done, but Findel's full-year results suggest the group has moved from turnaround to growth.
June 4, 2014

"There’s more to do, but we're definitely out of the woods," Findel (FDL) chief executive Roger Siddle told us as he unveiled the company's full-year results.

IC TIP: Buy at 258p

Last year, the home shopping and educational supplies group reported an 87 per cent rise in underlying pre-tax profit to £22m. The solid improvement, which excludes £18.7m of exceptional costs, can be attributed to growth in the Express Gifts and Education divisions, which together accounted for some four-fifths of group revenue.

Express Gifts delivered a 10 per cent increase in revenue and a 41 per cent increase in adjusted operating profit to £30.7m, as management's self-help measures bore fruit. Education turned a corner as profit rose by £3.3m to £4.1m. It even won three customer service awards - which is a big deal for a business that three years ago couldn't deliver toilet paper to London schools, says Mr Siddle.

The Kleeneze and Kitbag divisions, however, will take longer to recover. Kitbag's financial performance deteriorated, leading to a £4.1m loss, although it did win contracts and renegotiate unprofitable ones, which will help this year. Kleeneze faced serious stock and distribution difficulties, so profit fell by one third to £1.3m.

Cantor Fitzgerald expects underlying pre-tax profit of £28.5m this financial year, giving EPS of 28.4p.

FINDEL (FDL)
ORD PRICE:258pMARKET VALUE:£222m
TOUCH:257-258p12-MONTH HIGH:330pLOW: 158p
DIVIDEND YIELD:nilPE RATIO:469
NET ASSET VALUE:130p*NET DEBT:185%

Year to 28 MarTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2010600-74.8-12.4nil
2011541-1.4-1.0nil
2012461-14.2-0.4nil
20134910.53.4nil
20145153.30.6nil
% change+5+575-84-

Ex-div: na

Payment: na

*Includes intangible assets of £90.3m, or 105p a share