Findel plunges despite encouraging update

23rd Jan 2013 07:31

Shares of home shopping education supplies company Findel tumbled despite its assurance that it remains on the path to recovery in a difficult environment.The West Yorkshire based firm said total sales since the half-year to January 22nd 2013 rose 10.2% from the previous year, up from 7.7% in the 8 weeks to November 23rd 2012.Year-to-date, group sales are 8.9% ahead of the prior year. The group, which had to set aside £4.8m for the mis-selling of payment protection insurance at its largest Express Gifts business, said the division recorded its strongest Christmas sales performance for five years.Since the half-year, sales jumped 13.3% from the same time a year earlier, adding to the 9.1% increase during the eight weeks to November 23rd 2012. Sales at Kleeneze however remained challenging. Since the half-year, sales were down 9.1% from the same period a year before with distributor retention a continuing factor. Active distributor numbers are 10.3% below last year at this point, Findel explained.Meanwhile Kitbag continued to recover from an operating loss the prior year, with sales since the half-year up 19% on the year before with a gross margin improvement of around 2%. "Kitbag was recently awarded new contracts to support the online sales of Olympique Marseilles football club, effective immediately, and the Tour de France, effective Spring 2013," the group said.Total sales at its Education Supplies division, during its seasonally quiet period, fell 1.6% on the prior year.Its Healthcare division performed strongly, with sales since the half-year 20.1% ahead of prior year, after new contract starts and growth in existing contracts."The group remains on the path to recovery and overall we are positive about the progress we are making in a difficult environment. We remain focused on delivering our multi-year turnaround plan." "The board continues to believe that, as stated at the time of our interim results, the group will deliver improved results in the second half versus the prior year, continuing the trend of improved performance." Findel said its financial position continues to improve, with a focus on debt reduction whilst investing in growth.Shares of Findel were trading at 8.41p, down 8.09% at 08:30 in London.CJ