Studio Retail Group shares jump after £50m Findel sale
Studio Retail Group announced it has sold its education business Findel for £50m, as it reported a slump in profits in its interim results following a spike in additional PPI claims.
Shares in the company surged more than seven per cent after it announced Findel has been sold to the City of Wakefield Council as the lead authority of the Yorkshire Purchasing Organisation.
The figures
Total group revenue was flat at £228.1m in the 26 weeks to the end of 27 September.
Revenue from continuing operations grew by 0.3 per cent to £181.3m.
Total group adjusted profit before tax increased 12 per cent, however profit before tax from continuing operations plunged 83 per cent to £2.6m.
Core net debt reduced by £10.2m to £70.8m.
Why it’s interesting
Profit before tax from continuing operations slumped due to the recognition of additional provision PPI claims announced in September, which were estimated at £7.9m
The company also provided an update on Black Friday sales, saying more customers had held out for discounts this year and bought in record numbers.
The group saw record levels of online sessions in a single day, daily daily dispatches exceeding 100,000 parcels for the first time ever, and product sales in the last 1 weeks were up 10 per cent on the previous year.
What Studio Retail Group said
Group chief executive Phil Maudsley said: “This has been another period of strategic progress as we strengthen our position as a digital-first value retailer.
“We are pleased to have reported a strong increase in Adjusted PBT* in the first half, followed in Q3 by a record sales performance from Studio during our peak seasonal trading period.
“We know that Studio’s customers look for value all year round, so we do not need to chase promotional trends to maintain our market position. In support of this approach, we look forward to further initiatives coming on stream next year to enhance our digital-led value offer.
“We will look to refund the remaining customers’ PPI claims during the second half of the year.
“Education has delivered on the foundations laid last year and its leadership team should be congratulated on their hard work. We are delighted to have agreed the terms of a sale with YPO and we look forward to this completing in 2020.
“The retail marketplace is undoubtedly challenging, but Studio’s unique position as a digital-first, value- focused retailer with an integrated credit option gives us great confidence for the future.”
Main image credit: Studio Retail Group