30 November 2010 – interim results

The half yearly results to 1 October have revealed a slight improvement in trading at the home shopping and educational supplies group.  Sales from continuing operations have been pretty stable at £255.8m (2009: £260.0m) whilst operating profit before exceptionals rose to £6.2m (2009: £3.3m).  At the pre-tax level, the group lost £3.6m (2009: loss of £7.2m) before exceptionals on continuing opertaions.  Net debt at the end of the period was £336.8m (2009: £354.5m).  These results are reasonably encouraging but of more interest to investors is the news that the group aims to raise around £80m (before expenses) of new equity in a rights issue.  Of this £40m will be used to reduce borrowings with £35m being used to restructure the business following the recent detailed review of the operations.  The group’s two largest shareholders, who control over 50% of the equity are in support of these restructuring proposals although details have yet to be confirmed. The equity issue is likely to take place early in the new year.  Until details of these are known the shares remain a HOLD.