Home shopping group Flying Brands has beefed up its gifts division with the acquisition of online florist Flowers Direct.

It bought the company out of administration this week for £2.9m and hopes to find significant cost savings by putting it together with its current Flying Flowers operation.

Singer Capital Markets analyst and house broker Matthew McEachran said the acquisition was a “substantial component” for future earnings growth.

“This acquisition is attractive from an earnings enhancement perspective but it also an attractive deal from the perspective of scale and positioning,” he said. “Flying Flowers is positioned predominantly at the value end of the market. Flowers Direct brings them expertise and customers in the middle market as well as scale benefits that will start to erode the issue of buying and wastage.

“The management has been developing a turnaround strategy in its gifts division that has thus far been largely theoretical, but this latest news should give investors greater certainty that the plan is gaining critical mass.”