Findel (FDL),

home shopping and schools supplies business

Schroder Investment Management/ Toscafund have topped up - to 29% and 21.2% of the equity.

even though Findel is capitalized over £100 million they are locked in. Should have a high level of believe the business can deliver.
Schroder has a good record.

Tosca cut a reputation for astute timing with the turnaround of Hornby (HRN) although it lost money backing UK housebuilders prematurely and must have devoted enough time to backing Richard Branson's beleaguered rescue of Northern Rock.



Findel shares collapsed from over 500p in 2007 to 23p in 2008 of debt issues (300% financial gearing in its end-March 2008)
Revenues remained firm
Directors bought significantly as shares fell, at prices from about 290p to 230p.
July 2009 - issue 400,000 shares at 20p, diluting shareholders nearly five times  - £81 million raised.


11 March the then chief executive bought 50,000 shares at 28p to own 1,218,634 shares or 0.25% of the total. At least Schroder and Tosca must think there is long-term value at about 20p currently.
NAV of £114.7 m (23.5p EPS), goodwill/intangibles - £170 m of non-current assets
last trading update on 23 April 2010 left net assets exposed after citing exceptional charges:

£12 million fees refinancing;
£61 million impairment charges;
£8 million onerous負有法律義務lease provisions;
£12 million general restructuring.

£48 million cash within net debt of £310 million,

Findel's current share price is not asset-backed.

Pre-tax profit for the latest financial year (to 2 April 2010) has also been guided down, to about £16 million to £17.5 million, implying normalised earnings per share of about 3.5p.
Both the 'new' chairman and chief executive are incumbents有義務: an existing non-exec and the ex chief operating officer who has been with the group for over twenty years.
Full-year 2009/10 sales

Continuing operations have been effectively static at £582 million as home shopping (providing the bulk of revenues) held up well, supported by a new clothing range and tighter credit management.
Educational supplies have seen a fall in sales however, also accounting revisions. Schools are one area for spending cuts.
The group now has substantial headroom under its new banking facilities, to thrive, even if trading becomes more challenging.
Where will this leave listed firms supplying the public sector?

On 8 June - sale of Webb Group, for a nominal £1 - fully focus on its key businesses.
                   pre-tax profit of £0.8 million and gross assets of £51 million versus net liabilities of £37 million.

A main incentive - removing £15 million to £20 million working capital requirement;
                            £45 million write-off arising from this disposal was included in the 23 April update.
So indeed there have been croaks怨言here, but for long-term context it is worth remembering how Findel made over £50 million profit in its 2007/08 financial year. While some of that has permanently gone, brokers' analysts project recovery to about £27 million pre-tax profit, for earnings per share over 4p. Perhaps it is a little hasty to expect this in 2010/11, if fair enough as a medium to longer-term target.
For more information see findel.co.uk.