Findel: Encouraging trading statement. Stock off 5% first thing. Wrong reaction?

Wednesday, Jan 23 2013 by
2

Findel (LON:FDL) (9.25p and 3% of JIC portfolio) has issued an encouraging trading statement covering the 16 weeks to 22nd January. Total sales over this period are up 10.2% which is a healthy increase on the 7.7% achieved in the first 8 weeks of the period. For the year as a whole, i.e. since 31st March 2012, group sales have increased by 8.9%.

The stand out performance is at its largest business Express Gifts where sales were up 13.3% since the 30th September, driven by an 8% increase in active customers over the year and supported by a reduction in gross margins. The Company says that it expects Express Gifts to deliver a significant improvement in profits for the year as a whole and that bad debts have remained stable.

The remainder of the business are a bit of a mixed bag: Kleeneze continued to struggle with sales down 9.1% year on year as the number of distributors fell 10.3%. Kitbag saw sales up 19% with a 2% improvement in gross margin. Education supplies saw total sales down 1.6%, although management say that there was an encouraging growth in the core business offset by the shortened duration of Sainsbury's "Active Kids" scheme. The Healthcare division saw sales 21% ahead. Discussions regarding the sale of this division are progressing.

Overall the Group seems to be making good progress both operationally and on improving the balance sheet. I think there is scope for some upgrades to existing forecasts which value the shares at 10.2x for the year to March 2013, 7.3x March 2014, (40% growth) and 6.1x March 2015, (20% growth). I increased the holding to 3% of the portfolio last week and feel happy with that decision.

www.JohnsInvestmentChronicle.com


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Findel plc, along with its subsidiaries, is engaged in home shopping and education supplies sales through mail order catalogues and the Internet and the provision of outsourced healthcare services. It operates in six segments. Express Gifts segment is a direct mail order businesses in the United Kingdom. Kleeneze is a marketing company, specializing in supplying household and health and beauty products. Kitbag is a retailer of sports leisurewear and official football kits both through its own online operation, kitbag.com. Education Supplies is a supplier of resources and equipment to schools and educational establishments in the United Kingdom. Healthcare is an operator of outsourced Integrated Community Equipment Services (ICES) contracts for NHS trusts and local authorities. Overseas Sourcing is a sourcing office based in Hong Kong supplying importing services to various group companies and a small number of external customers. more »

Share Price (Full)
298.75p
Change
1.8  0.6%
P/E (fwd)
10.8
Yield (fwd)
n/a
Mkt Cap (£m)
255.2



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About johnrosier

Johnrosier

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In September 1984, I left university with a degree in Zoology and started work in the City of London. Over the next twenty five years most of my time was spent managing UK equity portfolios with Fleming Investment Management and Henderson Global Investors, for company and local authority pension schemes as well as the reserve fund for a well known charity. During 2009 I left full time employment and decided to take time out to consider the next stage of my career. In the meantime I have been putting my years of experience to good use investing the family savings. I have thoroughly enjoyed the freedom of investing from home and despite some tricky periods during 2011 it has been a rewarding experience. In January 2012 I set up www.johnsinvestmentchronicle.com in which I record my trades and the reasoning behind them. more »



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