The market responded positively to half-year numbers from Findel (FDL), as sales from online retail business Express Gifts – which trades under the name Studio – offset a continued sales decline in the education business, largely the result of a discontinued contract with Sainsbury's (SBRY) for fulfilling the grocer’s sports equipment voucher scheme. Operating profits across both divisions were down, but a tight grip on central costs and stable finance expenses – net debt from the revolving credit facility fell by £9m to £81m – meant adjusted pre-tax profits rose by 2.3 per cent to £11.6m, or 10.8 per cent on a constant-GAAP basis, once certain accounting changes are neutralised.
The movement in statutory profits reflects different exchange rates on forward purchases (the group buys most of its products from the Far East in US dollars), and "isn’t indicative" of underlying trading, so said chief executive Phil Maudsley. Instead, Mr Maudsley is focused on customer acquisition, particularly in the education business, where the objective is to "reverse several years of losing market share" by offering new clients improved digital tools at more competitive prices.
Analysts at broker N+1 Singer expect pre-tax profits of £28m for the year ending March 2019, giving EPS of 24.7p, compared with £26.8m and 23.4p in FY2018.
| FINDEL (FDL) | ||||
| ORD PRICE: | 226p | MARKET VALUE: | £195m | |
| TOUCH: | 223-226p | 12-MONTH HIGH: | 312p | LOW: 153p |
| DIVIDEND YIELD: | nil | PE RATIO: | 7 | |
| NET ASSET VALUE: | 40p* | NET DEBT: | £239m | |
| Half-year to 28 Sept | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 (restated) | 225 | 7.5 | 7.0 | nil |
| 2018 | 228 | 17.1 | 15.9 | nil |
| % change | +2 | +127 | +128 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £25.8m, or 30p a share | ||||
