Findel sales jumped 5.2% in the first half of the year leading to an increase in operating profit as the group’s turnaround initiatives gain traction.
Findel said sales at its Express Gifts business had surged 10.8% in the 26 weeks to September 27 as it “maintained a strong sales performance”.
The home shopping group said its investment in value and product range across Express Gifts generated increased total cash returns and helped attract more customers, which puts it in a good position ahead of the peak Christmas trading period, it added.
Meanwhile, bad debt indicators “continue to remain stable” and Findel said it is planning to open a sourcing office in Shanghai, China in the “coming weeks” to supply a broader range of goods to Express Gifts companies across the group.
Sales at Kleeneze fell 3.4% in the half year but Findel said this was mainly due to the impact of the later launch of the Christmas catalogues this year.
Kitbag sales dropped 6.9% against last year due to tough comparatives when sales were driven by the European Football Championships and the Olympics. As a result of this and clearance stock impacting margins, first half losses have widened.
But Findel said Kitbag’s turnaround is progressing and it has implemented a number of initiatives in the first half, already improving international sales “by a substantial amount” over the period. The changes are expected to have a positive impact on the business in the second half of the year.
Meanwhile, Kitbag recently launched a website for German sportsclub Borussia Dortmund.
Findel said: “We are very encouraged by the progress that we have made and the clear evidence of the success of our turnaround. In particular, Express Gifts has yet again delivered a strong performance.
“We are therefore well positioned ahead of our important peak trading period.
“Looking ahead, we see further potential in all group companies, and our strong performance in the first half of this year leads us to reiterate our ambition to enter a 7% to 9% range for group operating margin in the financial year commencing April 2014.”
Findel added that the better group performance over the last year has helped improve trading terms with suppliers.
Total bank debt for the group is expected to be £15m lower at £237m than in September 2012. Findel expects to have cut core bank debt by £20m.