Findel : Trading Statement

25 January 2019

Findel plc ('Findel' or 'the Group')

Q3-Trading statement

Record Q3 trading performance from Studio

Findel, the online value retail and education business, today issues a trading update covering the 15-week period to the end of December 2018 ('Q3').

Revenue growth	Q3	FY19 YTD
Studio (formerly Express Gifts)	+13.7%	+9.0%
Product	+13.6%	+7.8%
Financial Services	+14.2%	+12.8%
Education	-8.9%	-5.2%
Core	+3.8%	+1.2%
Retail (discontinued)	-91.4%	-93.3%
Group	+10.9%	+6.5%

Commenting on the Q3 performance Phil Maudsley, Group CEO, said:

'I am delighted with the strong performance of Studio in its peak trading period. This is testament to the increased strength and consumer recognition of our online value retail offer. We delivered record-breaking sales and strong margin performance in the weeks leading up to Black Friday and consequently we now anticipate full year PBT³ to be towards the upper end of current market expectations¹.'

The strong trading performance at Studio reported at the time of our interim results continued into December. Total revenue for Studio across Q3 increased by 13.7%, with product and financial services revenue both contributing broadly similar levels of growth.

Within this, the value of online sales increased by 25%, with 78% of total orders being received through online channels during that period and the mobile site proving especially popular with new customers for browsing and creating wish lists. Customers were particularly attracted by the product personalisation that Studio offers, with toys and personalised nightwear proving particularly popular during December as Christmas gifts.

Studio presents great value products to its 1.9 million customers all year round and so is less exposed to the heavy discounting cycles seen by many other retailers. Pleasingly, product margins have remained strong throughout the season and our expectations for the full year on margins remain unchanged².

The flexible credit option continues to be attractive to customers and the quality of the customer receivables book continues to perform in line with our expectations.

Group revenue in the period, including our Education business, which has seen continued progress in line with expectations via customer growth and a further increase in its online ordering penetration during the period, increased by 10.9% in Q3 and 6.5% YTD.

In line with the Group's strategy to raise the profile of the Group's main customer facing brand Studio, Express Gifts Limited changed its name to Studio Retail Limited during the period. This marks the next step in the evolution of the business, moving away from its background in catalogues and gifting products/cards, to being a modern, online value retailer with a broad product range.

Core net debt for the Group at 31 December 2018 was c.£54m, down by c.£23m from December 2017, in part due to the stronger trading performance seen during Q3 and improvements in working capital management throughout the season.

While January is typically a quieter period for the Group, the early weeks of the new Spring/Summer season for Studio have shown an encouraging response from customers, with homewares and garden ranges performing particularly well and in line with our expectations.

Given the strong performance from Studio in Q3, the Group believes that full-year PBT³ is now likely to be towards the upper end of current market expectations¹.

Despite the uncertain economic environment, the board believes that the Group now has strong momentum as we move into the final months of the financial period.

Enquiries

Findel plc 0161 303 3465

Phil Maudsley, Group CEO

Stuart Caldwell, Group CFO

Tulchan Communications 020 7353 4200

Catherine James

Will Smith

1) The current range of published analyst forecasts for FY19 PBT³, adjusted where appropriate for the transition to IFRS9, is £26.0m to £28.0m (FY18 proforma: £24.4m).

2) Guidance for Studio product margin % for FY19 remains +125bp to +175bp on FY18.

3) Before fair value movements on derivatives and individually significant items.

Notes to Editors

The Findel group contains market leading businesses in the UK online retailing and education supplies markets. It is primarily a retailer and distributor, handling and supplying specialist products manufactured by third parties.

The Group's activities are focused in two main operating segments:

· Studio (formerly named Express Gifts) - a leading UK online value retailer, primarily trading via the Studio.co.uk brand; and

· Education - the second largest listed independent supplier of resources and equipment (excluding information technology and publishing) to schools in the UK.

Cautionary statement

This announcement contains certain forward-looking statements (including beliefs or opinions) with respect to the operations, performance and financial condition of the Group. These statements are made in good faith and are based on current expectations or beliefs, as well as assumptions about future events. By their nature, future events and circumstances can cause results and developments to differ materially from those anticipated. Except as is required by the Listing Rules, Disclosure Guidance and Transparency Rules and applicable laws, no undertaking is given to update the forward-looking statements contained in this document, whether as a result of new information, future events or otherwise. Nothing in this document should be construed as a profit forecast or an invitation to deal in the securities of the Company. This announcement has been prepared for the Group as a whole and therefore gives greater emphasis to those matters which are significant to Findel plc and its subsidiary undertakings when viewed as a whole.