- UK home shopping specialist Findel said group sales for the full year are 5% ahead of the prior year, with sales in H2 4.7% ahead of prior year. Both operating profit and profit before tax are substantially ahead.

Results are led by our two largest businesses, Express Gifts and Findel Education.

The Group operating margin is anticipated to improve materially from 4.6% to c.6%.

Divisional Performance

Express Gifts has achieved strong sales growth in the year of 9.7% and a strong profit improvement. As the year has progressed, sales growth has been balanced with significant improvement in product gross margins. Overall customer growth in the calendar year to December 2013 was 8.3%, which provides a strong platform for continued growth. Bad debt indicators continue to remain stable and a reduction in the rate of bad debt is anticipated for the year.

The Education Supplies division has delivered a substantial improvement on prior year performance, with sales growth of 6.2% over prior year and a significant increase in profit.

As previously noted, there has been an element of uncertainty with regard to school buying patterns and this has continued to affect the final weeks of the year. Nonetheless, significant progress has been made during the year, with the business continuing to demonstrate its competitive strengths by winning further local authority contracts. Trading within Kleeneze has remained challenging during the year. Full year sales remain 5.4% lower than the prior year. As a result, Kleeneze profit for the full-year is below the prior year and recent trading weakness also means it is behind our expectation.

Primarily as a result of the already reported poor first-half performance, Kitbag will report an increased loss over prior year. For the full year, sales are 4.5% lower and the slower than expected turnaround of the business means that we have re-assessed the timeframe for delivering our overall trading targets for Kitbag. As a result of continued turnaround actions, Kitbag's trading since January has shown signs of improvement, with sales in line with the prior year and at improved margins.

The material progress made during the second half of the year on the turnaround plan, including contract renegotiations and operational changes, together with the major events scheduled for the summer of 2014 including the World Cup and the Ryder Cup, lead us to expect an improvement in sales and smaller losses in the coming year.

Financial Position

The Group's financial position has improved significantly with net debt at 28th March approximately £207m, some £18m below last year, and core net debt some £23m lower at £97m. The improved financial position reflects strong working capital controls, the sale of the healthcare division at the start of the year and the increase to the securitisation facility announced in January 2014.


Overall the Board continues to be very encouraged by the Group's progress and the significant recovery in the Group's prospects over the last three years. For the full-year, Group profit before tax is expected to be in line with current market expectations. The Board maintains its expectations for the coming financial year including entering its 7%-9% medium term operating margin range.

Full-year results are scheduled to be announced on 4th June 2014.

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