StockMarketWire.com - Home shopping and education group Findel said it has made excellent progress in the first half, building on the momentum achieved earlier in the year.

Group sales during the first half were 5.2% ahead of the prior year (6.2% excluding our Far Eastern sourcing operation) leading to an increase in first-half operating profit.

The largest business in our Group, Express Gifts, has maintained a strong sales performance, with sales 10.8% ahead of the prior year. The investment in value and product range continues to yield increased total cash returns and contributed to an increase in customer numbers, which positions the business well as we move into the peak Christmas period. Bad debt indicators continue to remain stable. The Far East sourcing operation has recently changed the management team of its Indian office and will be opening an office in Shanghai in the coming weeks to supply a broader range of goods to Express Gifts and other group companies.

Within Kleeneze, efforts to arrest decline continue, although comparators to prior year have worsened slightly. However, this recent deterioration is largely accounted for by a change in catalogue timing, with a later launch of the Christmas catalogues this year.

In the absence of the benefit of the European Football Championships and the Olympics, together with the poorer comparative on-pitch performance from some key partners, Kitbag sales were 6.9% below the prior year. As a result, first-half losses have increased versus last year, with an element of clearance also affecting margins. However, the business continues to make progress on its turnaround and has implemented a number of initiatives in the first half - particularly to improve international sales, which have risen by a substantial amount over the period - that are expected to yield a benefit in the second half. The business continues to demonstrate its leading position as a partner for sporting organisations with the recent launch of online retail operations for Borussia Dortmund (outside Germany).

The Education Supplies business is now well on the road to recovery and has achieved a much improved first half performance. Sales were 8.2% ahead of prior year, with an associated improvement in margin and profitability. UK brands achieved strong sales growth across the board, totalling 4.5%, together with a very strong recovery in the International business with sales 21% ahead of prior year.

The improvement in the Group's performance over the last year has been an important factor in improving trading terms with suppliers. The impact of that upon cashflow, a tight control over inventory levels, and the net proceeds from the sale of the Healthcare division earlier in the year has been to more than offset the increase in credit receivables resulting from the strong sales growth at Express Gifts. Total bank debt for the group is therefore expected to be in the region of £237m, £15m lower than September 2012 with core bank debt £20m lower.

The interim results announcement is scheduled for 27th November 2013.





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