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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Findel Plc | LSE:FDL | London | Ordinary Share | GB00B8B4R053 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 233.00 | 230.00 | 233.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMFDL
RNS Number : 4845Q
Findel PLC
30 November 2016
30 November 2016
Findel plc ("Findel" or "the Group")
Interim Results for the 27 weeks ended 30 September 2016
Findel, the online value retail and Education business, today announces its Interim Results for the 27 week period ended 30 September 2016.
Financial Summary
Results from continuing H1 2016 H1 2015 operations ------------------------ ---------- ---------- Revenue GBP213.0m GBP191.4m ------------------------ ---------- ---------- Profit before tax* GBP1.9m GBP3.4m ------------------------ ---------- ---------- Loss before tax (GBP0.6m) (GBP0.6m) ------------------------ ---------- ---------- Core net debt** GBP94.5m GBP95.6m ------------------------ ---------- ---------- Net assets GBP68.7m GBP80.4m ------------------------ ---------- ----------
* before exceptional items and revaluation of forward foreign exchange contracts (refer to Group Financial Results section for analysis)
** net debt excluding the securitisation facility relating to Express Gifts receivables and finance leases (see note 9 for details)
Highlights
-- Good sales performance in the first-half with Group like-for-like revenue up 6.5% on prior year (reported revenue up 11.3%)
-- Continued strong performance from Express Gifts, our largest business, with first-half like-for-like product revenue up 12.0% (reported revenue up 18.7%)
o Full-year recruitment target of 100,000 additional customers already achieved; with 12% increase in active customer base
o Sales from new and established customers continuing to generate strong growth during the peak Christmas trading period; orders during Black Friday week up 36%, a record week for the business
o Full FCA licence approval received in October
-- Findel Education seeing improving trends in overall sales as the year progresses
o Total revenue for first-half on a like-for-like basis down by 5.4% (on a reported basis down by 4.2%); Q2 like-for-like revenue down by 3%
o Classroom and Specialist brands showing year-on-year growth in Q2 and market share growth
o Market pricing conditions for our School brands remain challenging, with first-half revenue decline of 10%
o Warehouse consolidation successfully completed; will provide significant uplift to the profitability of the division for FY2018 and beyond
-- Further modest reduction in core net debt** despite strong growth at Express Gifts
o Express Gifts securitisation facility increased to GBP155m, up from GBP145m, to accommodate future sales and receivables growth
Outlook
-- FY2017: On track to deliver a full year performance in line with expectations
o Express Gifts: Sales in Christmas trading period in line with first-half rate of growth
o Education: Classroom and Specialist brands continue to show year-on-year growth
-- FY2018:
o Further progress in sales and customer recruitment by Express Gifts expected to broadly offset the impact of currency movements and increase in marketing investment
o Education anticipated to deliver an increase in profitability as a result of initiatives already undertaken
David Sugden, Executive Chairman, commented:
"We are pleased to report a half of significant progress across the Group. The strong trading performance of Express Gifts is extremely encouraging. It represents continued delivery against our digital strategy and gives us confidence to further increase investment in marketing and customer recruitment. The new management team in Education are also making good progress against a challenging market backdrop. Looking ahead, we remain confident that the ongoing investment in both our businesses will deliver improved returns for shareholders."
* before exceptional items and revaluation of forward foreign exchange contracts (refer to Group Financial Results section for analysis)
** net debt excluding the securitisation facility relating to Express Gifts receivables and finance leases (see note 9 for details)
References to "like-for-like" mean a comparison between adjusted figures showing equivalent 26-week calendar periods from each reporting period. A reconciliation to reported figures is presented on page 6. The current financial year will be a 53-week period ending on 31 March 2017.
Enquiries
Findel plc 0161 303 3465
David Sugden, Executive Chairman
Tim Kowalski, Group Finance Director
Tulchan Communications 020 7353 4200
Stephen Malthouse
Will Smith
Notes to Editors
The Findel Group contains market leading businesses in the UK home shopping and education supplies markets. It is primarily a retailer and distributor, handling and supplying specialist products manufactured by third parties.
The group's continuing activities are focused in two main operating segments, together with a small overseas sourcing operation:
-- Express Gifts - one of the largest direct mail order businesses in the UK; and
-- Findel Education - the largest listed independent supplier of resources and equipment (excluding information technology and publishing) to schools in the UK.
INTERIM MANAGEMENT REPORT
Summary
We are pleased with the overall performance of the group in the first-half of the year. Revenue for the period was strongly ahead, up by 6.5% on a like-for-like basis (up 11.3% on a reported basis). Pre-tax profit* was GBP1.9m, lower than the prior year result of GBP3.4m, reflecting an increase in profits from Express Gifts and market conditions for Findel Education remaining challenging.
The performance during the peak trading periods for each business has been very encouraging and underpins our confidence in the group's ability to deliver full-year results in line with expectations.
Express Gifts
Express Gifts is our core online value retail business. With over 1.5m customers, it is one of the largest direct mail order businesses in the UK, offering a broad range of home and leisure items, clothing, toys and gifts via catalogue and online, together with a leading personalisation offer. In order to build upon Express Gifts' market leading position, the business has been successfully focusing on accelerating sales growth and growing its customer base through a number of strategic initiatives.
At the start of the calendar year, the business set out with the aim of recruiting 100,000 additional customers for the year by focusing its core value proposition. Much of the additional recruitment activity has been based around new TV and digital campaigns that highlight particularly good-value products and direct customers towards the www.studio.co.uk website. We are therefore very pleased to report that the recruitment objective has already been passed, and that retention levels from existing customers have also increased throughout the year.
This investment together with the ongoing improvements in our online offering has generated product revenue growth in H1 on a like-for-like basis of 12.0% (reported basis: 18.7%), a rate which has been sustained as the business has moved into its peak trading period ahead of Christmas.
Financial services revenues increased by 11.3% on a like-for like basis (reported basis: 17.9%) in the first-half of the year, driven by the growth in balances resulting from increased product sales and the roll-out of risk-based pricing. The higher level of customer recruitment seen during the early months of the year, together with refinements to the management of the credit book and changes to the timing and extent of debt sales, has increased bad debt charges compared to the first half of last year. The project to introduce a new financial services operating platform is ongoing and is expected to be completed next summer, ahead of the peak trading season.
Placing the customer at the heart of the business is key to its long-term success. Therefore, in addition to a series of new features on the websites that were launched at the start of the year, we have established our own call centre operation in the Philippines to ensure that the business has sufficient capacity to manage customer enquiries throughout the peak trading season. This facility, which was opened at the start of the year, is operating well and is contributing to a significant reduction in lost sales compared to previous years.
A significant level of work has been undertaken over the last two years to improve the governance and effectiveness of controls and risk management in the business. We were therefore very pleased to receive confirmation from the FCA that our application for full consumer credit authorisation was approved in October.
Overall, the business produced an operating profit* for H1 of GBP5.3m, 7.2% ahead of the prior year, and is well positioned for the remainder of the year.
With the response to our investment activity exceeding our expectations, we have decided to increase the investment in both customer recruitment and customer-facing systems throughout the remainder of this year and next to support further sustainable sales growth.
Looking ahead to FY2018, sales growth, together with initiatives on pricing, sourcing, and efficiencies, will help to mitigate against adverse currency movements.
Findel Education
Findel Education, one of the leading suppliers of resources/equipment to schools in the UK and overseas, has performed well in the first-half of the year increasing its market share in a very challenging market.
The focus for the business over the last 18 months has been to arrest the decline in market share and return the business to market share growth. This objective has been achieved for our Classroom and Specialist brands with both recording sales increases in the second quarter, which is the business' peak period. The more commodity based School brands are still recording declining sales and further actions are underway to help these brands return to market share growth.
Whilst overall first-half revenue declined year-on-year, the rate of decline narrowed as the period progressed. Overall, adjusting for the revised timing of sales under the Sainsbury's Active Kids contract most of which will now occur in Q3 and the additional week, total revenues in the first-half are down by 5.4% (on a reported basis down by 4.2%) with revenues in the second quarter down by c.3%.
The operating profit* for H1 was GBP2.1m lower than prior year at GBP1.6m. Around half of this decline is attributable to the reduction in revenue and the timing of Sainsbury's revenues with the balance reflecting the investments that we are making in repositioning the business.
The warehouse consolidation project has now been successfully completed and is performing to plan. It will provide a significant uplift to the profitability of the division for FY2018 and beyond. Expectations for the division for the current year remain unchanged.
Exceptional items
As highlighted in our 2016 Annual Report, we had set aside a provision of GBP14.4m for customer redress and refunds in respect of flawed financial services products, based upon estimates and assumptions that were subject to change. Since then we have undertaken a pilot-scale contact programme for affected customers. Based on the findings from that programme a revised scheme of redress has now been proposed to and accepted by the FCA. A more informed analysis of the likely cost of this scheme indicates that an additional GBP3.3m charge will be required, although this remains an estimate ahead of rolling out the contact programme in the coming months.
The Board announced in July 2016 that it had received a proposal from Schroders plc, on behalf of Sports Direct International plc (SDI), to seek to appoint Mr Michael Ashley as Chairman of the Company in succession to David Sugden, who had indicated his intention to step down. Exceptional advisory costs totalling GBP0.7m have been incurred in the period to 30 September 2016 in dealing with this proposal and other related matters.
A credit of GBP0.1m has also been recorded in respect of the recovery of amounts due from the group's former subsidiary Kleeneze Limited, which were previously written off as unrecoverable.
Update on leadership
Further to the announcement last month, the process to appoint an independent Executive Chairman to replace David Sugden continues and an update will be provided early in the New Year.
Outlook
The Group remains on track to deliver a full year performance in line with expectations.
Looking ahead to FY2018, the success of the marketing campaigns in Express Gifts, together with the strength of its offer, underpins our confidence to invest in promoting continued strong sales growth. We will be increasing our investment in this area as we look to further grow the customer base. Whilst this, together with currency headwinds, is expected to lead to profits remaining broadly unchanged next year, it will strengthen the medium-term prospects for Express Gifts.
The successful completion of the warehouse consolidation project for Findel Education will provide a strong increase to its profitability in future years. Market conditions are unlikely to become easier in the near term and the business will therefore continue to focus on its increasingly successful actions to increase market share to provide profit growth in FY2018 and beyond.
* before exceptional items and revaluation of forward foreign exchange contracts (refer to Group Financial Results section for analysis)
** net debt excluding the securitisation facility relating to Express Gifts receivables and finance leases (see note 9 for details)
References to "like-for-like" mean a comparison between adjusted figures showing equivalent 26-week calendar periods from each reporting period. A reconciliation to reported figures is presented on page 6. The current financial year will be a 53-week period ending on 31 March 2017.
GROUP FINANCIAL RESULTS
The nature of the businesses within the Findel Group mean that profits have shown, and will continue to show, a significant seasonal bias with the majority of profit being earned in the second half.
Revenue
The current financial year will be a 53-week period ending on 31 March 2017. The first-half of the year is therefore a 27-week period that ended on 30 September 2016. Revenues from the Sainsbury's Active Kids scheme in Findel Education are normally received during the first-half of the year. However, due to one-time operational changes, most of these revenues will be seen in the second half of this year.
In order to provide a reasonable method of comparison between equivalent 26-week calendar periods from each reporting period ("like-for-like"), the reported figures for both the periods ended 30 September 2016 and 25 September 2015 have been adjusted. The adjustments made to reported figures for the period ended 30 September 2016 have the effect of removing the first week of the 27 week reporting period, whilst the adjustment made to the reported figures for the period ended 25 September 2015 has the effect of removing the first week of the 26 week reporting period and adding the impact of the first week of trading in H2 of FY2016. The adjustments made to the prior year figures also remove the impact of the timing of sales in respect of the Sainsbury's "Active Kids" scheme. The adjustments are summarised as follows:
Period ended 30 September 2016
Hot Features
Premium
Express Gifts Findel Major Overseas Total
Education divisions sourcing
---------------------------------
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Sales Financial Total
of goods services^
Reported revenue
- 27 weeks 110,363 47,384 157,747 53,548 211,295 1,754 213,049
Remove week
1 (2,195) (1,901) (4,096) (499) (4,595) - (4,595)
---------- ----------- -------- ----------- ----------- ---------- --------
Like-for-like
revenue 108,168 45,483 153,651 53,049 206,700 1,754 208,454
---------- ----------- -------- ----------- ----------- ---------- --------
^includes rendering of services and fees and interest.
Period ended 25 September 2015
Express Gifts Findel Major Overseas Total
Education divisions sourcing
---------------------------------
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Sales Financial Total
of goods services^
Reported revenue
- 26 weeks 92,963 40,202 133,165 55,889 189,054 2,307 191,361
Remove week
1/add week 27 3,614 678 4,292 1,129 5,421 (33) 5,388
Adjust for "Active
Kids" sales - - - (943) (943) (943)
---------- ----------- -------- ----------- ----------- ---------- --------
Like-for-like
revenue 96,577 40,880 137,457 56,075 193,532 2,274 195,806
---------- ----------- -------- ----------- ----------- ---------- --------
^includes rendering of services and fees and interest.
The group's revenue performance vs. the equivalent period in the prior year on both a like-for-like and reported basis is as follows:
LIKE-FOR-LIKE BASIS 2016 2015 Change Change
GBP000 GBP000 GBP000 %
Sales of goods 108,168 96,577 11,591 12.0%
Financial services^ 45,483 40,880 4,603 11.3%
Express Gifts 153,651 137,457 16,194 11.8%
--------------------- -------- -------- -------- --------
Findel Education 53,049 56,075 (3,026) (5.4%)
Major divisions 206,700 193,532 13,168 6.8%
Overseas sourcing 1,754 2,274 (520) (22.9%)
-------- -------- -------- --------
Group revenue 208,454 195,806 12,648 6.5%
-------- -------- -------- --------
^includes rendering of services and fees and interest.
REPORTED BASIS 2016 2015 Change Change
GBP000 GBP000 GBP000 %
Sales of goods 110,363 92,963 17,400 18.7%
Financial services^ 47,384 40,202 7,182 17.9%
Express Gifts 157,747 133,165 24,582 18.5%
---------------------- -------- -------- -------- --------
Findel Education 53,548 55,889 (2,341) (4.2%)
Major divisions 211,295 189,054 22,241 11.8%
Overseas sourcing 1,754 2,307 (553) (24.0%)
-------- -------- -------- --------
Group revenue 213,049 191,361 21,688 11.3%
-------- -------- -------- --------
^includes rendering of services and fees and interest.
Summary income statement
2016 2015 Change
GBP000 GBP000 GBP000
Express Gifts 5,254 4,900 354
Findel Education 1,558 3,619 (2,061)
Major divisions 6,812 8,519 (1,707)
Overseas sourcing (354) (76) (278)
---------------------- -------- -------- --------
Group operating
profit* 6,458 8,443 (1,985)
Net finance costs* (4,588) (5,057) 469
Profit before tax* 1,870 3,386 (1,516)
FX-hedge revaluation 1,390 - 1,390
Exceptional items (3,822) (3,939) 117
Loss before tax (562) (553) (9)
-------- -------- --------
* before exceptional items and revaluation of forward foreign exchange contracts
Borrowings and finance costs
The seasonality in the group's businesses mean that core net debt** is at its peak at the half-year point. The core net debt** at September 2016 stood at GBP94.5m, GBP1.1m lower than at September 2015 despite the strong growth in working capital requirements for Express Gifts additional recruitment.
Total net debt at the end of September 2016 was GBP226.7m (September 2015: GBP217.6m) with securitisation borrowings GBP8.3m higher at GBP130.3m (2015: GBP122.0m) due to Express Gifts strong receivables growth and new finance leases totalling GBP1.9m relating to the warehouse consolidation project for Findel Education.
Finance costs totalling GBP4.6m were incurred in the first-half of the year, some GBP0.5m lower than the equivalent period in FY2016 despite the higher total borrowings.
Foreign exchange contracts
The group amended its policy on foreign exchange risk management at the start of 2016 by moving away from an approach that only covered exposures occurring within the current financial year, instead moving to securing exposures on a rolling 12-month basis.
This new approach has led to a mark to market gain of GBP1.4m on forward contracts outstanding at 30 September 2016, which has been presented separately in the consolidated income statement. At the end of September 2016, derivative assets of GBP1.4m were recorded in the consolidated balance sheet in relation to forward foreign exchange contracts.
Exceptional items
As highlighted in our 2016 Annual Report, we had set aside a provision of GBP14.4m for customer redress and refunds in respect of flawed financial services products, based upon estimates and assumptions that were subject to change. Since then we have undertaken a pilot-scale contact programme for affected customers. Based on the findings from that programme a revised scheme of redress has now been proposed to and accepted by the FCA. A more informed analysis of the likely cost of this scheme indicates that an additional GBP3.3m charge will be required, although this remains an estimate ahead of rolling out the contact programme in the coming months.
The Board announced in July 2016 that it had received a proposal from Schroders plc, on behalf of Sports Direct International plc (SDI), to seek to appoint Mr Michael Ashley as Chairman of the Company in succession to David Sugden, who had indicated his intention to step down. Exceptional advisory costs totalling GBP0.7m have been incurred in the period to 30 September 2016 in dealing with this proposal and other related matters.
A credit of GBP0.1m has also been recorded in respect of the recovery of amounts due from the group's former subsidiary Kleeneze Limited, which were previously written off as unrecoverable.
Taxation
The group recognised an income tax charge in respect of continuing operations in the first-half of GBP0.7m (September 2015: GBP 0.7m). The estimated effective tax rate for the full year, excluding the impact of exceptional items is 21.1% (September 2015: 20.8%), which is slightly higher than the prevailing corporation tax rate of 20%, owing to items of non-taxable expenditure and a reduction in the rate at which deferred tax assets are recognised from 18% to 17%.
Balance sheet
Net assets at September 2016 stood at GBP68.7m, compared to GBP80.4m at September 2015.
The group's pension deficit measured under IAS 19 has increased from a low of GBP2.3m at March 2016 to GBP12.8m primarily due to a decrease in bond yields.
Findel plc
Group Financial Information
Condensed Consolidated Income Statement
27 week period ended 30 September 2016
Before
exceptional Exceptional
items items Total
GBP000 GBP000 GBP000
-------------------------------------- ------------ ----------- ---------
Continuing operations
Revenue 213,049 - 213,049
Cost of sales (109,083) - (109,083)
Gross profit 103,966 - 103,966
-------------------------------------- ------------ ----------- ---------
Trading costs (96,118) (3,822) (99,940)
-------------------------------------- ------------ ----------- ---------
Analysis of operating profit/(loss):
- EBITDA* 11,445 (3,822) 7,623
- Depreciation and amortisation (4,987) - (4,987)
-------------------------------------- ------------ ----------- ---------
Operating profit/(loss) before
fair value movements on derivative
financial instruments 6,458 (3,822) 2,636
Fair value movements on derivative
financial instruments 1,390 - 1,390
-------------------------------------- ------------ ----------- ---------
Operating profit/(loss) 7,848 (3,822) 4,026
-------------------------------------- ------------ ----------- ---------
Finance costs (4,588) - (4,588)
-------------------------------------- ------------ ----------- ---------
Profit/(loss) before tax 3,260 (3,822) (562)
Tax (expense)/income (686) 806 120
Profit/(loss) for the period 2,574 (3,016) (442)
-------------------------------------- ------------ ----------- ---------
Discontinued operation
Result from discontinued operation,
net of tax - - -
Profit/(loss) for the period 2,574 (3,016) (442)
-------------------------------------- ------------ ----------- ---------
Loss per ordinary share
from continuing operations
Basic (0.51)p
Diluted (0.51)p
from discontinued operation
Basic -
Diluted -
total attributable to
ordinary shareholders
Basic (0.51)p
Diluted (0.51)p
*Earnings before interest, taxation, depreciation, amortisation and fair value movements on derivative financial instruments.
Condensed Consolidated Income Statement
26 week period ended 25 September 2015
Before
Exceptional Exceptional
items items Total
GBP000 GBP000 GBP000
------------------------------------- ------------ ----------- --------
Continuing operations
Revenue 191,361 - 191,361
Cost of sales (98,672) - (98,672)
Gross profit 92,689 - 92,689
--------------------------------------- ------------ ----------- --------
Trading costs (84,246) (3,871) (88,117)
--------------------------------------- ------------ ----------- --------
Analysis of operating profit/(loss):
- EBITDA* 11,761 (3,871) 7,890
- Depreciation and amortisation (3,318) - (3,318)
--------------------------------------- ------------ ----------- --------
Operating profit/(loss) before
fair value movements on derivative
financial instruments 8,443 (3,871) 4,572
Fair value movements on derivative
financial instruments - - -
Operating profit/(loss) 8,443 (3,871) 4,572
Finance costs (5,057) (68) (5,125)
--------------------------------------- ------------ ----------- --------
Profit/(loss) before tax 3,386 (3,939) (553)
Tax (expense)/income (705) 821 116
Profit/(loss) for the period 2,681 (3,118) (437)
--------------------------------------- ------------ ----------- --------
Discontinued operation
Loss from discontinued operation,
net of tax (3,478) (243) (3,721)
Loss for the period (797) (3,361) (4,158)
--------------------------------------- ------------ ----------- --------
Loss per ordinary share
from continuing operations
Basic (0.51)p
Diluted (0.51)p from discontinued operations Basic (4.33)p Diluted (4.33)p total attributable to ordinary shareholders Basic (4.84)p Diluted (4.84)p
*Earnings before interest, taxation, depreciation, amortisation and fair value movements on derivative financial instruments.
Condensed Consolidated Income Statement
52 week period ended 25 March 2016
Before
Exceptional Exceptional
items items Total
GBP000 GBP000 GBP000
------------------------------------- ----------- ----------- ---------
Continuing operations
Revenue 410,601 - 410,601
Cost of sales (216,446) - (216,446)
Gross profit 194,155 - 194,155
-------------------------------------- ----------- ----------- ---------
Trading costs (159,478) (25,458) (184,936)
Analysis of operating profit/(loss):
- EBITDA* 41,519 (25,458) 16,061
- Depreciation and amortisation (6,842) - (6,842)
Operating profit/(loss) before
fair value movements on derivative
financial instruments 34,677 (25,458) 9,219
Fair value movements on derivative
financial instruments - - -
Operating profit/(loss) 34,677 (25,458) 9,219
Finance costs (9,901) (998) (10,899)
-------------------------------------- ----------- ----------- ---------
Profit/(loss) before tax 24,776 (26,456) (1,680)
Tax (expense)/income (5,230) 5,321 91
Profit/(loss) for the period 19,546 (21,135) (1,589)
-------------------------------------- ----------- ----------- ---------
Discontinued operation
Loss from discontinued operation,
net of tax (3,268) (5,339) (8,607)
Profit/(loss) for the year 16,278 (26,474) (10,196)
-------------------------------------- ----------- ----------- ---------
Loss per ordinary share
from continuing operations
Basic (1.85)p
Diluted (1.85)p
from discontinued operation
Basic (10.00)p
Diluted (10.00)p
total attributable to ordinary
shareholders
Basic (11.85)p
Diluted (11.85)p
*Earnings before interest, taxation, depreciation, amortisation and fair value movements on derivative financial instruments.
Condensed Consolidated Statement of Comprehensive Income
27 week period ended 30 September 2016
27 weeks 26 weeks 52 weeks
to 30.9.2016 to 25.9.2015 to 25.3.2016
GBP000 GBP000 GBP000
--------------------------------- ------------- ------------- -------------
Loss for the period (442) (4,158) (10,196)
Other Comprehensive Income
Items that may be reclassified
to profit or loss
Cash flow hedges (60) - 42
Currency translation (loss)/gain
arising on consolidation (73) (63) 213
--------------------------------- ------------- ------------- -------------
(133) (63) 255
--------------------------------- ------------- ------------- -------------
Items that will not subsequently
be reclassified to profit
and loss
Remeasurements of defined
benefit pension scheme (11,564) 1,713 7,001
Tax relating to components
of comprehensive income 1,966 (216) (1,134)
--------------------------------- ------------- ------------- -------------
(9,598) 1,497 5,867
--------------------------------- ------------- ------------- -------------
Total comprehensive loss
for period (10,173) (2,724) (4,074)
--------------------------------- ------------- ------------- -------------
The total comprehensive loss for the period is attributable to the equity shareholders of the parent company Findel plc.
Condensed Consolidated Balance Sheet
At 30 September 2016
30.9.2016 25.9.2015 25.3.2016
GBP000 GBP000 GBP000
---------------------------- --------- --------- ---------
Non-current assets
Goodwill 16,691 16,691 16,691
Other intangible assets 29,964 29,453 30,631
Property, plant and
equipment 42,993 35,720 41,423
Deferred tax assets 8,028 9,957 4,182
97,676 91,821 92,927
---------------------------- --------- --------- ---------
Current assets
Inventories 74,088 70,640 53,472
Trade and other receivables 241,549 230,727 229,848
Derivative financial
instruments 1,390 - -
Cash and cash equivalents 19,082 36,047 34,405
Current tax assets 1,525 - 3,554
Assets held for sale - 31,858 -
----------------------------- --------- --------- ---------
337,634 369,272 321,279
---------------------------- --------- --------- ---------
Total assets 435,310 461,093 414,206
----------------------------- --------- --------- ---------
Current liabilities
Trade and other payables (81,674) (88,634) (58,175)
Current tax liabilities - (3,841) -
Derivative financial
instruments - (75) -
Obligations under finance
leases (532) - (518)
Provisions (18,791) (4,609) (17,498)
Liabilities held for
sale - (28,371) -
----------------------------- --------- --------- ---------
(100,997) (125,530) (76,191)
---------------------------- --------- --------- ---------
Non-current liabilities
Bank loans (243,908) (245,395) (248,911)
Obligations under finance
leases (1,344) - (1,658)
Provisions (7,482) (900) (6,277)
Retirement benefit
obligation (12,846) (8,914) (2,294)
(265,580) (255,209) (259,140)
---------------------------- --------- --------- ---------
Total liabilities (366,577) (380,739) (335,331)
----------------------------- --------- --------- ---------
Net assets 68,733 80,354 78,875
----------------------------- --------- --------- ---------
Equity
Share capital 48,644 126,442 48,644
Capital redemption
reserve - 403 -
Share premium account - 92,954 -
Translation reserve 900 697 973
Hedging reserve (60) (42) -
Accumulated losses 19,249 (140,100) 29,258
Total equity 68,733 80,354 78,875
----------------------------- --------- --------- ---------
Condensed Consolidated Cash Flow Statement
27 week period ended 30 September 2016
27 weeks 26 weeks 52 weeks
to 30.9.2016 to 25.9.2015 to 25.3.2016
GBP000 GBP000 GBP000
-------------------------------------- ------------- ------------- -------------
Loss for the period (442) (4,158) (10,196)
Adjustments for:
Income tax (120) (895) (959)
Finance costs 4,588 5,125 10,899
Depreciation of property, plant
and equipment 4,074 2,872 5,812
Amortisation of intangible assets 913 1,348 2,537
Share-based payment expense 31 368 239
Loss on disposal of property,
plant and equipment 23 75 76
Loss on disposal of subsidiary - - 4,782
Fair value movements on financial
instruments plus premiums paid (1,480) - -
Defined benefit pension contributions (1,042) (1,000) (2,500)
Operating cash flows before
movements in working capital 6,545 3,735 10,690
Increase in inventories (20,616) (24,265) (6,846) Increase in receivables (14,019) (11,440) (5,965) Increase/(decrease) in payables 23,018 35,204 (5,133) Increase/(decrease) in provisions 2,498 (1,808) 16,143 --------------------------------------- ------------- ------------- ------------- Cash (used in)/ generated from operations (2,574) 1,426 8,889 Income taxes refunded/(paid) 269 (798) (2,494) Interest paid (4,168) (4,851) (9,549) Net cash from operating activities (6,473) (4,223) (3,154) --------------------------------------- ------------- ------------- ------------- Investing activities Interest received 2 - - Proceeds on disposal of property, plant and equipment 22 - - Purchases of property, plant and equipment and software and IT development costs (5,927) (6,826) (15,940) Sale of subsidiary (net of cash held in subsidiary) 2,318 - 11,115 Net cash used in investing activities (3,585) (6,826) (4,825) --------------------------------------- ------------- ------------- ------------- Financing activities Repayment of amounts owing under finance lease arrangements (299) - - Bank loans repaid (6,434) (1,958) (5,334) Securitisation loan drawn 1,431 2,332 9,224 Net cash from financing activities (5,302) 374 3,890 --------------------------------------- ------------- ------------- ------------- Net decrease in cash and cash equivalents (15,360) (10,675) (4,089) Cash and cash equivalents at the beginning of the period 34,405 38,470 38,470 Effect of foreign exchange rate changes 37 (11) 24 Cash and cash equivalents at the end of the period 19,082 27,784* 34,405 --------------------------------------- ------------- ------------- -------------
*Includes an overdraft balance of GBP8,263,000 in Kitbag Limited, disclosed within liabilities held for sale at 25 September 2015.
Condensed Consolidated Statement of Changes in Equity
27 week period ended 30 September 2016
Retained
Capital Share earnings/
Share redemption premium Translation Hedging (accumulated Total
capital reserve account reserve reserve losses) equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- -------- ----------- -------- ----------- -------- ------------- --------
At 25 March 2016 48,644 - - 973 - 29,258 78,875
Total comprehensive
loss - - - (73) (60) (10,040) (10,173)
Share-based payments - - - - - 31 31
--------------------- -------- ----------- -------- ----------- -------- ------------- --------
At 30 September
2016 48,644 - - 900 (60) 19,249 68,733
--------------------- -------- ----------- -------- ----------- -------- ------------- --------
Retained
Capital Share earnings/
Share redemption premium Translation Hedging (accumulated Total
capital reserve account reserve reserve losses) equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- -------- ----------- -------- ----------- -------- ------------- -------
At 27 March 2015 126,442 403 92,954 760 (42) (137,807) 82,710
Total comprehensive
loss - - - (63) - (2,661) (2,724)
Share-based payments - - - - - 368 368
At 25 September
2015 126,442 403 92,954 697 (42) (140,100) 80,354
--------------------- -------- ----------- -------- ----------- -------- ------------- -------
Retained
Capital Share earnings/
Share redemption premium Translation Hedging (accumulated Total
capital reserve account reserve reserve losses) equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- -------- ----------- -------- ----------- -------- ------------- -------
At 27 March 2015 126,442 403 92,954 760 (42) (137,807) 82,710
Total comprehensive
loss - - - 213 42 (4,329) (4,074)
Capital reduction (77,798) (403) (92,954) - - 171,155 -
Share-based payments - - - - - 239 239
--------------------- -------- ----------- -------- ----------- -------- ------------- -------
At 25 March 2016 48,644 - - 973 - 29,258 78,875
--------------------- -------- ----------- -------- ----------- -------- ------------- -------
The total equity is attributable to the equity shareholders of the parent company Findel plc.
Notes to the Condensed Consolidated Financial Statements
1. General Information
The condensed consolidated financial statements have been approved by the board on 29 November 2016.
Statement of compliance
These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union ("EU") and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority. As required by the latter, the interim financial statements have been prepared applying the accounting policies and presentation that were applied in the company's published consolidated financial statements for the 52 weeks ended 25 March 2016. They do not include all the information required for full annual financial statements, and should be read in conjunction with the group's consolidated financial statements as at and for the 52 weeks ended 25 March 2016.
The financial information for the period ended 25 March 2016 is not the company's statutory accounts for that financial year. Those accounts which were prepared under IFRS as adopted by the EU ("adopted IFRS") have been reported on by the company's auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor draws attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under sections 498(2) or (3) of the Companies Act 2006.
Going concern basis
In determining whether the group's interim financial statements for the period ended 30 September 2016 can be prepared on a going concern basis, the directors considered all factors likely to affect its future development, performance and its financial position, including cash flows, liquidity position and borrowing facilities and the risks and uncertainties relating to its business activities in the current economic climate. The financial position of the group, its cash flows, liquidity position and borrowing facilities and the key risks and uncertainties are set out in further detail above in the Finance Director's Review on pages 20 to 24 of the group's annual report and accounts for the 52 week period ended 25 March 2016.
The directors have reviewed the trading and cash flow forecasts for the period to December 2017 as part of their going concern assessment, including reasonable downside sensitivities which take into account the uncertainties in the current operating environment including amongst other matters demand for the group's products, its available financing facilities, and regulatory licensing and compliance. Although at certain times the level of headroom reduces to a level which is less than the directors would regard as desirable in the long term, the directors believe it to be sufficient and have identified controllable mitigating actions that could be implemented if required. The group's banking facilities mature in December 2019.
Taking into account the above uncertainties and circumstances, the directors formed a judgement that there is a reasonable expectation that the group has adequate resources to continue in operational existence for a period of at least 12 months.
Accordingly, they continue to adopt the going concern basis in preparing the group's interim consolidated financial statements.
Risks and uncertainties
The principal risks and uncertainties which could impact the group's long-term performance remain those detailed on pages 22 to 23 of the group's annual report and accounts for the 52 week period ended 25 March 2016, a copy of which is available on the group's website, www.findel.co.uk. No new risks have been identified.
The risks detailed in the annual report and accounts remain valid as regards their potential to impact the group during the second half of the current financial year. The group has a comprehensive system of risk management installed within all parts of its business to mitigate these risks as far as is possible.
Seasonality
The nature of the businesses within the Findel group mean that profits have shown, and will continue to show, a significant seasonal bias with the majority of profit being earned in the second half.
2. Accounting Policies
As required by the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority, this condensed set of financial statements has been prepared applying the same accounting policies and computation methods that were applied in the preparation of the company's published consolidated financial statements for the year ended 25 March 2016.
Estimates
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing the interim financial statements, the significant judgements made by management in applying the group's accounting policies and key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 25 March 2016 with the exception of the following:
Provision for financial services redress and refunds
As required by IAS 37 Provisions, Contingent Liabilities and Contingent Assets, management has reviewed the provision created at 25 March 2016 in respect of customer redress and refunds in respect of flawed financial services products. On the basis of the results of a pilot-scale contact programme for affected customers conducted during the current financial reporting period, management has revised its best estimate of the expenditure required to settle the present obligation and has therefore recorded an increase in the amount provided of GBP3.3m.
3. Trading costs
An analysis of the group's trading costs is as follows:
27 weeks
to 30
September 26 weeks to 25 September 52 weeks to 25 March
2016 2015 2016
---------- --------------------------------- ---------------------------------
Continuing Continuing Discontinued Continuing Discontinued
operations operations operation Total operations operations Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- ---------- ---------- ------------ ------- ---------- ------------ -------
Selling and
distribution
costs:
- Before exceptional
items 61,196 51,847 4,003 55,850 96,822 7,103 103,925
- Exceptional
items - - - - - - -
Administrative
expenses:
- Before exceptional
items 34,922 32,399 12,899 45,298 62,656 22,542 85,198
- Exceptional
items 3,822 3,871 300 4,171 25,458 5,480 30,938
99,940 88,117 17,202 105,319 184,936 35,125 220,061
--------------------- ---------- ---------- ------------ ------- ---------- ------------ -------
4. Segmental analysis
27 weeks to 30 September 2016
Revenue Continuing operations
Express Findel Overseas Total
Gifts Education sourcing
GBP000 GBP000 GBP000 GBP000
----------------------- -------- ----------- ---------- --------
Sales of goods 110,363 53,548 1,754 165,665
Rendering of services
and fees 7,642 - - 7,642
Interest 39,742 - - 39,742
----------------------- -------- ----------- ---------- --------
Reportable segment
revenue 157,747 53,548 1,754 213,049
----------------------- -------- ----------- ---------- --------
Loss after tax
-------
Continuing operations
Express Findel Overseas
Gifts Education Sourcing Total
GBP000 GBP000 GBP000 GBP000
--------------------- ---------- --------- -------
Reportable segment
results 5,254 1,558 (354) 6,458
------------------------- --------------------- ---------- --------- -------
Exceptional items (3,657) (165) -- (3,822)
------------------------- --------------------- ---------- --------- -------
Operating profit/(loss)
before fair value
movements
on derivative financial
instruments 1,597 1,393 (354) 2,636
------------------------- --------------------- ---------- ---------
Fair value movements
on derivative financial
instruments 1,390
------------------------- --------------------- ---------- --------- -------
Operating profit 4,026
------------------------- --------------------- ---------- --------- -------
Finance costs (4,588)
--------------------- ---------- --------- -------
Loss before tax (562)
Tax 120
------------------------- --------------------- ---------- --------- -------
Loss after tax (442)
------------------------- --------------------- ---------- --------- -------
26 weeks to 25 September 2015
Revenue
-------------------------- ------------ ---------------- ---------- -------- ------------------ -----------
Discontinued Group
Continuing operations operation
-------------------------- ---------------------------------------------------- ------------------ -----------
Express Findel Overseas Total Kitbag Total
Gifts Education sourcing
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------- ------------ ---------------- ---------- -------- ------------------ -----------
Sales of goods 92,963 55,889 2,307 151,159 33,268 184,427
Rendering
of services
and fees 7,716 - - 7,716 - 7,716
Interest 32,486 - - 32,486 - 32,486
-------------------------- ------------ ---------------- ---------- -------- ------------------ -----------
Reportable
segment revenue 133,165 55,889 2,307 191,361 33,268 224,629
-------------------------- ------------ ---------------- ---------- -------- ------------------ -----------
Loss after
tax
-------
Discontinued
Continuing operations operation Group
---------------------------------------
Express Findel Overseas
Gifts Education Sourcing Total Kitbag Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------- ---------- --------- -------
Reportable
segment results 4,900 3,619 (76) 8,443 (4,200) 4,243
------------------------ ------- ---------- --------- ------- ------------ -------
Exceptional
items (3,483) (388) - (3,871) (300) (4,171)
------------------------ ------- ---------- --------- ------- ------------ -------
Operating profit/loss)
before fair
value movements
on derivative
financial instruments 1,417 3,231 (76) 4,572 (4,500) 72
------------------------ ------- ---------- --------- ------- ------------ -------
Fair value - - -
movements on
derivative
financial instruments
------------------------ ------- ---------- --------- ------- ------------ -------
Operating profit/(loss) 4,572 (4,500) 72
------------------------ ------- ---------- --------- ------- ------------ -------
Finance costs
(includes GBP68,000
exceptional
finance costs) (5,125) - (5,125)
------- ---------- --------- -------
Loss before
tax (553) (4,500) (5,053)
Tax 116 779 895
------------------------ ------- ---------- --------- ------- ------------ -------
Loss after
tax (437) (3,721) (4,158)
------------------------ ------- ---------- --------- ------- ------------ -------
52 weeks ended 25 March 2016
Revenue
-------------------- -------- ----------- ---------- -------- ------------- --------
Discontinued
Continuing operations operation Group
Express Findel Overseas Total Kitbag Total
Gifts Education sourcing
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- -------- ----------- ---------- -------- ------------- --------
Sales of goods 224,880 94,401 3,222 322,503 63,958 386,461
Rendering of
services and
fees 16,369 - - 16,369 - 16,369
Interest 71,729 - - 71,729 - 71,729
Reportable segment
revenue 312,978 94,401 3,222 410,601 63,958 474,559
-------------------- -------- ----------- ---------- -------- ------------- --------
Loss after tax
--------
Discontinued
Continuing operations operation Group
Express Findel Overseas
Gifts Education Sourcing Total Kitbag Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Reportable segment
results 31,747 3,214 (284) 34,677 (3,995) 30,682
------------------------- -------- ---------- --------- -------- ------------ --------
Exceptional items (19,876) (5,582) - (25,458) (5,480) (30,938)
------------------------- -------- ---------- --------- -------- ------------ --------
Operating profit/loss)
before fair value
movements on derivative
financial instruments 11,871 (2,368) (284) 9,219 (9,475) (256)
------------------------- -------- ---------- --------- -------- ------------ --------
Fair value movements - - -
on derivative
financial instruments
------------------------- -------- ---------- --------- -------- ------------ --------
Operating profit/(loss) 9,219 (9,475) (256)
------------------------- -------- ---------- --------- -------- ------------ --------
Finance costs
(includes GBP998,000
exceptional finance
costs) (10,899) - (10,899)
Loss before tax (1,680) (9,475) (11,155)
Tax 91 868 959
------------------------- -------- ---------- --------- -------- ------------ --------
Loss after tax (1,589) (8,607) (10,196)
------------------------- -------- ---------- --------- -------- ------------ --------
5. Exceptional items
27 weeks 26 weeks 52 weeks
to 30.9.16 to 25.9.15 to 25.3.16
GBP000 GBP000 GBP000
-------------------------------------- ----------- ----------- -----------
Continuing operations
Exceptional trading costs
Express Gifts financial services
redress and refunds 3,300 2,000 14,388
Advisory costs relating to
shareholder proposal 655 - -
Amounts received in respect
of balances due from Kleeneze
Limited previously written
off as irrecoverable (133) - -
Amounts owing from Kleeneze
Limited written off as irrecoverable - 1,018 367
Receivables provisioning
in Express Gifts - - 4,300
Restructuring costs - 853 1,649
Onerous lease provisions - - 4,754
3,822 3,871 25,458
Exceptional financing costs
Debt refinancing costs - 68 998
3,822 3,939 26,456
----------- ----------- -----------
Tax credit in respect of
exceptional items (806) (821) (5,321)
----------- ----------- -----------
Total 3,016 3,118 21,135
----------- ----------- -----------
Discontinued operation
Restructuring costs - 300 698
Profit on disposal of subsidiary - - 4,782
- 300 5,480
----------- ----------- -----------
Tax credit in respect of
exceptional items - (57) (141)
----------- ----------- -----------
Total - 243 5,339
----------- ----------- -----------
Group total 3,016 3,361 26,474
----------- ----------- -----------
The directors consider that all items recorded within exceptional items warrant separate presentation in the income statement in order to fairly reflect the underlying performance of the group.
As highlighted in our 2016 Annual Report, we had set aside a provision of GBP14.4m for customer redress and refunds in respect of flawed financial services products, based upon estimates and assumptions that were subject to change. Since then we have undertaken a pilot-scale contact programme for affected customers. Based on the findings from that programme a revised scheme of redress has now been proposed to and accepted by the FCA. A more informed analysis of the likely cost of this scheme indicates that an additional GBP3.3m charge will be required, although this remains an estimate ahead of rolling out the contact programme in the coming months.
The Board announced in July 2016 that it had received a proposal from Schroders plc, on behalf of Sports Direct International plc (SDI), to seek to appoint Mr Michael Ashley as Chairman of the Company in succession to David Sugden, who had indicated his intention to step down. Exceptional advisory costs totalling GBP0.7m have been incurred in the period to 30 September 2016 in dealing with this proposal and other related matters.
In the 52 week period ended 25 March 2016, costs of GBP367,000 (26 weeks ended 25 September 2015: GBP1,018,000) were incurred in respect of the write-off of amounts due to Express Gifts from Findel plc's former subsidiary Kleeneze Limited, which were assessed as irrecoverable. GBP133,000 has been recovered during in the 27 week period ended 30 September 2016 which has been credited to income statement.
A charge of GBP4,300,000 was recorded in respect of receivables provisioning in Express Gifts in the 52 week period ended 25 March 2016. Please refer to note 2 in the 2016 annual report and accounts for further details.
In the 52 week period ended 25 March 2016 restructuring costs of GBP1,649,000 (26 weeks ended 25 September: 2015: GBP853,000) related to management changes, redundancies and costs associated with the disposal of Kitbag Limited and the consolidation of Findel Education's warehousing operations from two sites to one, as well as organisational changes made within Express Gifts in relation to compliance with new FCA requirements.
Costs of GBP4,754,000 were provided in the 52 week period ended 25 March 2016 in respect of an onerous lease provision arising as a result of the consolidation of Findel Education's warehousing operations from two sites to one.
Following the refinancing of the group's bank and securitisation facilities in November 2015, costs of GBP998,000 were recognised in the 52 week period ended 25 March 2016 (26 weeks ended 25 September: 2015: GBP68,000) in respect of the write-off of the unamortised fees that were paid in respect of previous refinancing exercises in May 2014 and January 2015.
6. Taxation
Income tax for the 27 week period ended 30 September 2016 is based on an estimated effective tax rate for the full year of 21.3% (26 week period ended 25 September 2015: 20.9% from continuing operations), giving rise to a tax credit of GBP120,000 in the period (26 week period ended 25 September 2015: GBP116,000 from continuing operations). The estimated effective tax rate for the full year, excluding the impact of exceptional items is 21.1% (26 week period ended 25 September 2015: 20.8% from continuing operations).
7. (Loss)/earnings per share
Weighted average number
of shares
---------------------------------- -------------- ------------- -------------
27 weeks 26 weeks 52 weeks
to 30.9.2016 to 25.9.2015 to 25.3.2016
No. of No. of No. of
shares shares shares
----------------------------------- ------------- ------------- -------------
Ordinary shares in issue at
start of the period 86,442,534 86,442,534 86,442,534
Effect of own shares held (114,808) (581,878) (348,343)
----------------------------------- ------------- ------------- -------------
Weighted average number of shares
- basic 86,327,726 85,860,656 86,094,191
----------------------------------- ------------- ------------- -------------
From continuing operations
(Loss)/earnings attributable
to ordinary shareholders
-------------
27 weeks 26 weeks 52 weeks
to 30.9.2016 to 25.9.2015 to 25.3.2016
GBP000 GBP000 GBP000
-------------------------------------- ------------- ------------- -------------
Net loss attributable to equity
holders for the purposes of
basic loss per share (442) (437) (1,589)
-------------------------------------- ------------- ------------- -------------
Other exceptional items (net
of tax) (3,016) (3,050) (20,137)
Exceptional finance costs (net
of tax) - (68) (998)
-------------------------------------- ------------- ------------- -------------
Net profit attributable to equity
holders for the purpose of adjusted
earnings per share 2,574 2,681 19,546
-------------------------------------- ------------- ------------- -------------
(Loss)/earnings per share
-------------------------------------- ------------- ------------- -------------
Loss per share - basic (0.51)p (0.51)p (1.85)p
-------------------------------------- ------------- ------------- -------------
Earnings per share - adjusted*
basic 2.98p 3.12p 22.70p
-------------------------------------- ------------- ------------- -------------
Loss per share - diluted (0.51)p (0.51)p (1.85)p
-------------------------------------- ------------- ------------- -------------
Earnings per share - adjusted*
diluted 2.98p 3.12p 22.70p
-------------------------------------- ------------- ------------- -------------
From discontinued operation
Loss attributable to ordinary
shareholders
-------------
27 weeks 26 weeks 52 weeks
to 30.9.2016 to 25.9.2015 to 25.3.2016
GBP000 GBP000 GBP000
-------------------------------------- ------------- ------------- -------------
Net loss attributable to equity
holders for the purposes of
basic loss per share - (3,721) (8,607)
-------------------------------------- ------------- ------------- -------------
Other exceptional items (net
of tax) - (243) (5,339)
Exceptional finance costs (net
of tax) - - -
-------------------------------------- ------------- ------------- -------------
Net loss attributable to equity
holders for the purpose of adjusted
loss per share - (3,478) (3,268)
-------------------------------------- ------------- ------------- -------------
Loss per share
-------------------------------------- ------------- ------------- -------------
Loss per share - basic - (4.33)p (10.00)p
-------------------------------------- ------------- ------------- -------------
Loss per share - adjusted* basic - (4.05)p (3.80)p
-------------------------------------- ------------- ------------- -------------
Loss per share - diluted - (4.33)p (10.00)p
-------------------------------------- ------------- ------------- -------------
Loss per share - adjusted* diluted - (4.05)p (3.80)p
-------------------------------------- ------------- ------------- -------------
Total attributable to ordinary
shareholders
(Loss)/earnings attributable
to ordinary shareholders
-------------
27 weeks 26 weeks 52 weeks
to 30.9.2016 to 25.9.2015 to 25.3.2016
GBP000 GBP000 GBP000
------------------------------------ ------------- ------------- -------------
Net loss attributable to equity
holders for the purposes of
basic loss per share (442) (4,158) (10,196)
------------------------------------ ------------- ------------- -------------
Other exceptional items (net
of tax) (3,016) (3,293) (25,476)
Exceptional finance costs (net
of tax) - (68) (998)
------------------------------------ ------------- ------------- -------------
Net profit/(loss) attributable
to equity holders for the purpose
of adjusted earnings/(loss)
per share 2,574 (797) 16,278
------------------------------------ ------------- ------------- -------------
(Loss)/earnings per share
------------------------------------ ------------- ------------- -------------
Loss per share - basic (0.51)p (4.84)p (11.85)p
------------------------------------ ------------- ------------- -------------
Earnings per share - adjusted*
basic 2.98p (0.93)p 18.90p
------------------------------------ ------------- ------------- -------------
Loss per share - diluted (0.51)p (4.84)p (11.85)p
------------------------------------ ------------- ------------- -------------
Earnings/(loss) per share -
adjusted* diluted 2.98p (0.93)p 18.90p
------------------------------------ ------------- ------------- -------------
* Adjusted to remove the impact of exceptional items.
The (loss)/earnings per share attributable to convertible ordinary shareholders is GBPnil.
8. Derivative financial instruments
At 30 September 2016 the group has outstanding derivative financial instruments as follows:
Forward foreign exchange contracts
At 30 September 2016, the group was committed to forward foreign exchange contracts with a notional sterling contract value of GBP14,452,000. The fair value of the derivative asset recognised in the balance sheet at 30 September 2016 in this regard was GBP1,390,000. Changes in fair value of forward foreign exchange contracts amounted to a credit of GBP1,390,000 in the period and has been recorded within administrative expenses.
Interest rate cap contract
On 4 May 2016, the group entered into an interest rate cap contract in order to restrict the LIBOR element of its interest cost as follows
At 30 September 2016
Notional
borrowing Fair
amount Cap rate value
GBP000 GBP000
-------------- ---------- -------- ------
Maturing in 1
to 2 years 100,000 1.06% -
-------------- ---------- -------- ------
The GBP100,000,000 cap was designated as a cash flow hedge from inception in accordance with IAS 39. The movement in the fair value of these instruments during the period was as follows:
GBP000
-------------------------------------- ------
At 25 March 2016 -
Purchase of interest rate caps 90
Movement in fair value charged
to the hedging reserve (60)
Movement in fair value of ineffective
element charged to finance costs (30)
At 30 September 2016 -
-------------------------------------- ------
Basis for determining fair values
The fair value of both interest rate caps and forward foreign exchange contracts is their market value at the balance sheet date. Market values are based on the duration of the derivative instrument together with the quoted market data including interest rates, foreign exchange rates and market volatility at the balance sheet date.
The financial instruments held by the group at the balance sheet date are valued under the Level 2 measurement basis of the fair value hierarchy: (i.e. based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)). There were no transfers between Level 1 and Level 2 during the period.
9. Net debt
References to "net debt" and "core net debt" in the interim management statement are derived as follows:
30.9.2016 25.9.2015 25.3.2016
GBP000 GBP000 GBP000
-------------------------- --------- --------- ---------
Non-current assets
Loans and borrowings (243,908) (245,395) (248,911)
Obligations under finance
leases (1,876) - (2,176)
Cash and cash equivalents 19,082 36,047 34,405
Overdraft disclosed
within liabilities
held for sale - (8,263) -
--------------------------- --------- --------- ---------
Net debt (226,702) (217,611) (216,682)
--------------------------- --------- --------- ---------
Add back
Obligations under finance
leases 1,876 - 2,176
Securitisation borrowing* 130,342 122,019 128,911
--------------------------- --------- --------- ---------
Core net debt (94,484) (95,592) (85,595)
--------------------------- --------- --------- ---------
*Disclosed within loans and borrowings in the consolidated balance sheet.
Responsibility Statement
We confirm that to the best of our knowledge:
(a) the condensed consolidated financial statements have been prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the European Union;
(b) the interim management report and condensed consolidated financial statements include a fair review of the information required by:
(i) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(ii) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
By order of the Board
T J Kowalski P B Maudsley
Group Finance Director Managing Director, Home
Shopping
29 November 2016 29 November 2016
This document may contain forward looking statements. In particular, but without limitation, nothing contained in this document should be relied upon or construed as a promise or a forecast, including any projection or management estimate, any statements which contain the words "anticipate", "believe", "intend", "estimate", "expect", "forecast" and words of a similar meaning, reflect the management of the company's current beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on such statements. Any forward looking statements speak only as at the date of this document, and except as required by applicable law, Findel plc undertakes no obligation to update or revise publicly any forward looking statements, whether as a result of new information or otherwise.
Independent Review Report to Findel plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the 27 week period ended 30 September 2016 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated cash flow statement, the condensed consolidated statement of changes in equity and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1 the, annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the 27 week period ended 30 September 2016 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.
Nicola Quayle for and on behalf of KPMG LLP
Chartered Accountants
1 St Peter's Square, Manchester, M2 3AE
29 November 2016
This information is provided by RNS
The company news service from the London Stock Exchange
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