Findel's back to basics after review

The Burley-in-Wharfedale company announced the result of its 'Full Potential Review' yesterday, saying that it will go back to basics to improve trading.

New chief executive Roger Siddle said: "We have five extremely good businesses. There are real opportunities in all of them and there are no better people to drive them forward than the people who are running them at the moment."

Asked what had gone wrong at the company, which reported a reduced half year loss of 15.5m yesterday, Mr Siddle said: "The group made a series of acquisitions that haven't worked and consumed a lot of funds. They have left the group with an overwhelming debt burden."

Findel hopes that the 80m rights issue will help resolve this. Of the 80m, 35m will be invested in the business to achieve the targets set out in the Full Potential Review and 40m will be paid to the group's lenders to reduce debts.

The plan is to reduce net debt by around 110m.

Net debt was cut by 18m to 337m over the six months to October 1.

One of the key targets of the Full Potential Review is to extend the group's Kitbag football merchandising operation.

Traditionally, Kitbag has run the online retail operation for a number of football clubs including Manchester United, Chelsea, Real Madrid and Barcelona.

But now it is keen to run the entire online, retail and catalogue operations for clubs, following the success of its full service contract with Everton.

"We think there could be 10 to 15 potential contracts over the next two to three years," said Mr Siddle.

"There are significant growth opportunities in the Kitbag business. We've proved we can do it and each contract could be worth 3m to 10m a year."

Findel has already signed up Manchester City and Nottingham Forest for the full service contract.

Mr Siddle said the group will also invest in its catalogue home shopping businesses, which operate under the Studio, 24, Ace and Health & Home Shopping brand names.

Money will be spent on systems, improving credit management to target more credit-worthy customers and better buying processes.

In addition Mr Siddle said there are plans to introduce more value products to appeal to price conscious consumers. Cheaper products have gone down very well with customers in the run up to Christmas and best sellers have included games consoles and their associated games.

The group has decided to keep its education and healthcare businesses, despite speculation they could be sold off to allow Findel to focus on its core home shopping operations.

Mr Siddle said the education supplies business has an eight per cent share of the 1.5bn market, but has lost share over the past few years due to a failure to meet customer needs.

A new management team has been put in place.

For the six months to October 1, the group's pre-tax losses fell from 22.7m to 15.5m and revenues fell four per cent to 264m.

The company said it would not pay any interim dividend. It last paid an interim dividend in January 2009.

Findel's shares, which have lost 30 per cent since the company said its full-year results would be hurt by delayed contracts earlier this month, closed up 6.5 per cent, a rise of 0.75p to 12.25p last night.

Group's management shake-up

FINDEL has totally reorganised its top management team over the past year.

Roger Siddle was appointed chief executive in September having worked as a consultant for the group for several months previously.

Philip Maudsley, the previous chief executive, remains on the board as managing director of the Home Shopping division.

Tim Kowalski was appointed group finance director in August.

Chairman David Sugden said: "We believe that we now have the right management team in place to implement the turnaround of the group."

The group has also hired Laurel Powers-Freeling as an independent non-executive director.