Blackfriar: Findel ensures that dear prudence is back in fashion

The old mantra of growth at any cost has been replaced with caution – and not before time.

Earlier this week, Findel used the long-overdue word 'prudence' three times in one statement as it warned of another 7m hit to profits.

The Burley-in-Wharfedale company, which made losses of 76m on turnover of 547m in 2009, insisted the latest provisions were the result of "a more prudent approach" to accounting.

Up until relatively recently, Findel had been on the acquisition trail, using debt to build the retail conglomerate.

But the recession exposed this strategy, and the group has been forced to sell or close businesses it paid millions for. In August it sold wedding retailer Confetti and online gadget store I Want One of Those.com for 600,000. Days later, Confetti slumped into administration. IWOOT had been bought, along with other businesses, for 34m in 2006.

In June it offloaded entertainment group Webb for 1 to turnaround firm Endless.

Furnishings outfit The Cotswold Company cost the group 100,000 in 2007, and Findel paid 7m for Letterbox in 2006. Last year it closed the loss-making brands, taking impairment charges of 17.6m.

Despite all of this, analysts say the company is still "firmly in the intensive care room".

Debt, which stood at 310m in March, is the millstone around its neck.

The company has brought in a new management team, who aim to restore confidence with a root and branch review.

Former chief executive of professional education group BPP Holdings, Roger Siddle, joined the group as chief executive in September.

Findel also brought in retail expert Tim Kowalski to replace former finance director Chris Hinton. His departure followed the exit of long-standing chairman Keith Chapman in April, and former chief executive Patrick Jolly who left in March. Findel's new management will need to convince investors, many of whom backed the company's 81m placing and open offer last year, that they have a firm grip on this sprawling retail enterprise.

Prudence is a good place to start.

BEING one of the few senior UK banking executives to escape the financial crisis with their reputation largely intact makes Antnio Horta-Osrio the ideal replacement for Eric Daniels at Lloyds.

Mr Horta-Osrio will become chief executive of Europe's fourth biggest bank by market value when he leaves Santander for Lloyds in March. At Santander, he has made its UK operation a force to be reckoned with amid the toughest banking market for decades. Almost by stealth, he led the merger with Abbey and took advantage of the financial crisis to buy Alliance & Leicester, Bradford & Bingley's branches, and most recently, 318 branches from Royal Bank of Scotland.

Analysts are impressed. "It is an exciting appointment. He has a track record, he comes in to run the biggest UK retail bank and will give real momentum to it," said Chris Wheeler, banking analyst at Mediobanca.

Part of Santander's apparent tactic over the past few years has been to keep out of the UK media spotlight, only holding press conferences in Madrid, and preferring to talk directly to the consumer rather than through the media.

At the Confederation of Business and Industry conference last week, Mr Horta-Osrio's speech was a rare break from the norm, but hinted at the more public role he will soon be taking.

Yesterday he alluded so some of the challenges he will face.

Leaving Santander, where he was tipped for the top job, means he will miss out on an IPO of the group's UK business. Instead he faces the challenge of holding the bank together in the face of shrill calls for it to be broken up, managing the Government's 41 per cent shareholding, selling branches, and not least of all, continuing the painful job of cutting jobs as it merges Halifax Bank of Scotland.

A challenging few years lie ahead for Mr Horta-Osrio.

THE City will get its second sight of new Morrisons boss Dalton Philips today when the Bradford-based supermarket chain reveals third-quarter results.

The numbers are expected to be impressive with overall growth of five to six per cent. The all-important like-for-like sales are likely to remain at between one and two per cent.

Analyst Dave McCarthy at Evolution Securities describes Morrisons' performance as "creditable" as the industry struggles in an adverse consumer environment.

The City will be expecting more news from Mr Philips today about his plans to branch out into convenience stores with a trial of three smaller shops next year.

Morrisons will also carry out a limited internet trial in one area of the country, which is yet to be decided.

This is the riskier of the two options. It is incredibly difficult to make a profit selling food online.

In this tricky market, there is no need to rush headlong into the internet grocery market.