• 10.6% drop in full-year pre-tax profit to £24.8m for the 52 weeks to March 25
  • Executive chairman David Sugden to step down
  • Findel said it was a “year of progress to improve longer-term prospects”

Findel has reported a 10.6% drop in pre-tax profits before exceptionals to £24.8m following a “more challenging than expected” year.

It also revealed that its executive chairman, David Sugden, plans to step down from the role at the business’ upcoming annual general meeting.

The speciality retailer – the third largest shareholder of which is Mike Ashley’s Sports Direct – said it was a “year of progress to improve longer-term prospects”, reporting a 14.3% drop in operating profit to £9.2m after exceptionals for the 52 weeks to March 25.

After exceptional costs, Findel made a pre-tax loss of £1.7m.

Findel, which has an express gifts arm and an education division, grew group sales by 0.9% to £410.6m during the period.

The retailer said it had a “mixed performance” in its express gifts division, illustrating a “need to improve a number of areas”. Express gifts sales rose by 3.8% but its operating profit here fell by 5.1% during the year.

However, Findel said “significant operational improvements” were introduced during the year “to improve future product sales growth prospects”, including the expansion of its product range, credit changes, and investment in marketing its call centre operation in the Philippines.

Sugden said: “In terms of financial performance, last year was more challenging than we expected. However, considerable progress has been made in strengthening the group in a number of areas that will improve longer term prospects.

“We now have a well-financed group focused solely on the growth of two core businesses – Express Gifts and Findel Education. We believe that this represents a turning point in the development of Findel, as, with the successful sale of Kitbag, we can now focus entirely on generating enhanced shareholder value from strong organic growth in our two core businesses.”

He added: “We are confident that we will return to profitable growth in the current and future years.”

During the period Findel sold its replica football shirt business Kitbag to US-based sports merchandise business Fanatics for £11.55m, thwarting an attempt by Mike Ashley’s Sports Direct to acquire the company.

Earlier this year, Sports Direct upped its stake in Findel to 29.8% – very close to the point at which it would have to table a formal bid.

In January Findel claimed that profits were likely to be £2m to £3m lower than forecast after difficult trading at its Express Gifts business, but sales seemed to have picked up as the etailer hailed “an improvement” in performance two months later.