Findel plans to raise £80m through rights issue

In a statement to accompany its half year results, the company said it had completed a full review of the business, which identified significant potential for enhanced performance largely through a "back to basics" approach.

The company's revenue for the 26 weeks ended October 1 20101 was 264m, compared with a restated figure of 273.6m in the same period the year before. The loss before tax was 15.5m, compared with a restated figure of 22.7m in the corresponding period of the previous year.

Operating profit from continuing operations, before exceptional items, was 6.2m, which was an improvement on the previous year's result of 3.3m

The Burley-in-Wharfedale-based company said the recruitment of a new executive management team had been completed.

David Sugden, the chairman of Findel, said: "I am pleased to report that in the 26 weeks ended October 1 2010 we have begun to make real progress towards improving the group's performance and profitability and securing its longer term success.

"Our full potential review has identified that our existing businesses are capable of significant improvement in profit performance. We are at an advanced stage in our negotiations with our major shareholders and lenders to agree a comprehensive refinancing of the group's balance sheet. This would provide a solid platform to enable the operational improvements identified in our review to be implemented swiftly, whilst also reducing the group's net indebtedness."

In a statement, the company added: "As announced in July, we have undertaken a full potential review of all of the group's operations, which has identified the potential for significant enhancement in performance of all of our businesses. The full potential review sets ambitious targets but the actions required to improve performance stem largely from improved operating disciplines and investment in core areas of the business. These actions are tangible and within our control and therefore, we believe, achievable.

"Implementation of these operational improvements will require approximately 35m of new funding. In addition, as we highlighted at the time of announcing our preliminary results, the level of debt in the group is too high and the board has been working with its advisers to examine alternatives for restructuring the balance sheet.

"Following discussions with the group's lenders and its major shareholders, the company intends to raise around 80m of new equity, intended to be by way of rights issue, the proceeds of which will be used to fund the operational improvements identified by the full potential review and restructure our debt."