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Findel strong first half driven by home shopping business

Express Gifts increases customer base and sales, providing basis for sustainable medium-term profit growth
Woman at laptop with credit card
Online retail is particularly attractive at a time of tighter household budgets

Findel PLC (LON:FDL) shares surged 24% this morning after delivering a strong first half sales performance driven primarily by its Express Gifts home shopping business.

The group’s like-for-like revenue was up 8.4% on 2016 while adjusted profit before tax was up by £10.1 million to £11.9mln.

READ: Findel appoints new CEO, full year profits to miss market forecasts

Express Gifts, which primarily trades via the Studio.co.uk brand, continues to show strong growth in customers and revenue.

In morning trade, Findel shares were up 37.5p to 190.5p.

Customer base grows strongly

Findel said its customer base has grown by 230,000 since September 2016 and the active base is now 1.7mln.

The group expects its customer recruitment program to result in 2mln customers at Express Gifts within three years.

There was a strong performance from clothing sales in the half, with a 23.9% increase in sales compared to the first-half of 2016.

Online ordering increased from 54.7% to 66.4% in the 12 months to September 2017.

Findel said the strong performance from Express Gifts, with continued growth in customer numbers and sales, provides the basis for sustainable medium-term profit growth.

Operational turnaround of Findel Education

This is alongside the operational turnaround of the group’s other major business Findel Education.

This process, which involves reviewing its marketing positioning, buying strategy and cost base, is proceeding in line with the group’s plans.

This business is the second largest listed independent supplier of resources and equipment, excluding information technology and publishing, to schools in the UK.

Findel chief executive Phil Maudsley said, “We set out clear objectives at the time of our full-year results in June and I’m delighted to report a period of strong delivery against those plans.

“Our online value retail proposition is proving particularly attractive at a time of tighter household budgets in the UK.

“In particular, customers are responding well to improvements in the quality and price points across our clothing offer, encouraging customers to shop more frequently.

“We are encouraged by the initial response to our operational plan for Education.”

Full year guidance remains unchanged

Guidance for the full year earnings and net debt remains unchanged, confirming the group’s expectations for strong profit growth.

“The majority of the group’s revenue is generated in the second half, and our peak trading period, including Black Friday, is performing well against strong comparators. We are on track to deliver against our plan for profitable growth,” Maudsley said.

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