Findel shares plunge after £7m work delays revealed

The latest in a string of issues to hit the Burley-in-Wharfedale group saw its shares yesterday regain some of their losses to close down three per cent at 16p, giving the company a market value of just 78.3m.

Findel, which made losses of 76m on turnover of 547m in 2009, insisted the provisions were the result of "a more prudent approach" to accounting.

Its continuing Full Potential Review, a root and branch business analysis, is "progressing well", added the group.

Findel has sold and closed businesses to cut its debt pile, which stood at 310m in March. Accounting issues in its educational supplies division also wiped 6.4m from 2009 profits.

The company has also brought in a new management team, but analysts said it remains in "intensive care".

Former chief executive of professional education group BPP Holdings Roger Siddle joined the group as chief executive in September. Mr Siddle succeeded Philip Maudsley, who was demoted to managing director of the group's home shopping business after a brief spell at the helm.

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 yesterday said it will give a full update on its review when it reports half-year results at the end of November. It said the review took "a more prudent approach" to internal forecasts for the year to the end of March 2011 and future years.

This year's results had included 3m profits from a major international contract and some smaller educational contracts.

However, those have been delayed and Findel said while they may still be awarded this year, it is more prudent to assume they will fall next year. The remaining 4m hit comes from revaluing property gains, pensions and foreign exchange.

Findel, which has just entered its peak pre-Christmas trading period, said it is too soon to say how it will pan out, but added catalogue customers "appear to be responding well" to offers and new initiatives.

Brokerage Seymour Pierce, repeated its "sell" rating and cut its earnings forecasts. "The stock remains firmly in the intensive care room," said analysts in a note.

"We continue to be concerned about the high level of debt, which was 310m at the end of March 2010, and the valuation of the business on a sum of the parts basis in view that trading still remains challenging."

The broker reduced its 2010/11 pre-tax profit forecast to 15m from 20m.