Home shopping and educational supplies specialist Findel suffered a sharp drop in operating profits and made an overall loss due to debt refinancing for the six months to October 3, as the retailer sought to stabilise the business.

Group sales dipped slightly from £287.7m to £277.2m, while operating profits plunged from £18.2m to £3.3m. Findel reported an overall loss of £21.1m against last year’s £1.8m profit, largely due to costs associated with refinancing and extending its business debt.

Profits at its home shopping business rose 5%, with “significant expansion” of its clothing offer. Findel said it had secured financing until June 2012 and that its cash generation programme was on track to deliver £165m by March 2011.

Analysts said that operating profits were worse than expected but backed the retailer’s business plan.

Evolution analyst James Wheatcroft principally blamed the poor performance of its educational offer but said the retailer’s “cost-saving efforts will protect Findel’s margins and underlying cash flow”.

Caroline Stewart at Seymour Pierce noted: “The group is on track to achieve planned debt reduction.”