23 April 2010 – trading update

Another disappointing trading update from the home shopping and educational supplies group Findel is clearly trying the patience of even the most loyal of the group’s shareholders.  Although revenues for the year to 3 April are likely to be similar to last year, a poor performance in the educational supplies division and the adoption of more prudent accounting policies in the latter business mean that overall group profits are likely to be lower than expected.  Before exceptional items, pre-tax profit is now expected to be between £16m and £17.5m for adjusted earnings per share of 3.5p.  Although some improvement is likely in the new financial year, the group still has significant borrowings of over £300m at the year end and this is likely to be a drag on the share price.  Brave investors may like to buy shares now, but those of a more cautious nature may prefer to wait until the announcement of the preliminary results in June.  HOLD.