Home shopping group Findel is considering a rights issue among other changes to its funding arrangements and has revealed a disappointing financial performance.

The retailer said it has been holding discussions with lenders for some time to put certain debt facilities onto a longer term and committed basis and that lenders will require revisions to its revolving credit facility terms.

Findel said no final decision has been taken about an equity issue, but the idea is supported by the retailer’s biggest shareholder and by chairman Keith Chapman, who together speak for 40 per cent of the group’s shares.

Findel said that its underlying financial performance in the year to April 3 was “at the lower end of expectations”.

Tough trading conditions and a scaling back of customer recruitment to its home shopping credit business meant home shopping sales were down 4 per cent year on year. Sales at the education supplies division also fell as a result of concern about public sector funding, but the healthcare division’s sales rose.

Findel said: “Since the financial year-end the group’s performance has remained broadly in line with the trends seen in the prior financial year, and bad debt rates in the credit business remain tightly managed and in line with our expectations.”

The retailer said that it would delay the issuing of audited results and a further announcement would be made “in due course”.