Unfairpak Forum - How Farepak Stole Christmas

On Friday 13th Oct 2006 - Farepak Hampers went into administration. Over 100,000 customers were told that no food hampers or vouchers or other goods will be supplied this Christmas as promised, and no refunds! Share your thoughts here...
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PostPosted: Wed Oct 18, 2006 7:41 pm 
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Findel PLC
13 October 2006

13 October 2006

Findel PLC


Findel PLC, one of the country's leading Home Shopping and Educational Supplies
businesses, is pleased to announce that it has acquired the following businesses
and assets from the Administrators or Administrative Receivers of certain
companies within the Group comprised of European Home Retail plc and its
subsidiaries ('EHR').

* the trading business and assets of Kitbag Limited, one of Europe's largest
online sports retailers;

* the trading business and assets of I Want One Of Those.com Limited, one of
the UK's most visited gifts and gadgets website;

* the remaining 40% of the share capital of Home Farm Hampers Limited not
already owned by Findel;

* the trading business and assets of Kleeneze UK Limited, a leading network
marketing company; and

* certain other trading assets comprising principally the Cabouchon brand
name and the infrastructure assets required for the Home Farm business

The total consideration of £34m was satisfied in cash. The unaudited net assets
relating to the businesses acquired were £19m.The acquired businesses had
unaudited revenues of £113m in the year to 30 April 2006. The acquisitions are
expected to be earnings enhancing in the first full financial year commencing 1
April 2007.

The acquisitions are firmly in line with the Company's stated strategy of
developing its cash with order and internet businesses to complement the current
home shopping division and increase the utilisation of its assets.

* Kitbag is an internet retailer selling a wide range of sportswear products
from the leading sports brands. In addition to its own website
http://www.kitbag.com. Kitbag also has the exclusive rights to operate the
official website stores for FC Barcelona, Reebok, Manchester United,
Chelsea, Celtic and Nike Football. Unaudited annual turnover rose by 47% in
the year ended 30 April 2006 to £14.3m (2005, £9.7m) with an unaudited
EBITDA loss in that year of £0.5m.

* I Want One Of Those ('IWOOT') is one of the most frequently visited
internet retailers, selling a wide range of gifts and gadgets via its
website http://www.iwantoneofthose.com. Unaudited annual turnover rose by 49% in
the year ended 30 April 2006 to £10m (2005, £6.6m) with an unaudited EBITDA
loss in that year of £0.6m.

The acquisitions of Kitbag and IWOOT significantly enhance Findel's range of
internet operations, an area Findel has identified for growth, whilst increasing
its market share in the increasingly important cash with order home shopping
market. In addition, the acquisitions of Kitbag and IWOOT will materially add to
Findel's systems and know how in Internet retailing and bring strong management
teams who are highly experienced in this fast growing sector.

* Home Farm Hampers is a Christmas savings club whereby customers save
regularly for shopping vouchers, food hampers and non-food items to be
supplied to them shortly prior to Christmas. It was established as a
jointly owned enterprise with Findel in 1986.

* Kleeneze is a network marketing company established in the UK in 1923. It
offers a range of over 1,500 home and personal care products presented
through a variety of catalogues and sold through a network of over 14,000
self-employed distributors in the UK, Ireland, Netherlands and Germany.
Kleeneze had unaudited revenues of £89m in the year ended 30 April 2006
contributing unaudited EBITDA of £6m.

The acquisition of Kleeneze provides Findel with a further strong home shopping
brand, with considerable potential for integration, working capital and other
synergistic benefits alongside the Group's existing operations.

In its audited accounts for the year ended 30 April 2005, the entire EHR Group
had sales of £175.9m and a net profit before taxation of £5.9m. The net profit
included non operating exceptional profits of £1.4m. At the most recent balance
sheet date of 31 October 2005 it had gross assets of £80.6m.

On 30 June 2006 EHR announced that as a result of the placing in administration
of the voucher provider to its subsidiary Farepak it would face a peak borrowing
requirement above its bank facilities. On 23 August 2006 EHR announced that it
had requested suspension of its shares as no conclusion had been reached with
its bankers over the provision of additional finance.

On 13 October 2006 EHR announced the Appointment of an Administrative Receiver
to European Home Retail plc, noting that this had been as a result of the
appointment of an Administrator by its subsidiary Farepak, and an inability to
reach a funding agreement with its bankers.

Findel is confident that the businesses which are being acquired, are strong and
can flourish under Findel's management and contribute to the overall strength of
the Findel Group. Findel is not acquiring the Farepak business.

Patrick Jolly, CEO of Findel PLC said:

'These acquisitions are directly in line with our stated strategy to grow our
home shopping business profitably through bolt on acquisitions and maximise the
return on the assets that division employs. We have identified substantial
opportunities for both cost and revenue synergies and working capital
efficiencies which will be realised over the medium term. The Board is
confident that these acquisitions will enhance the Group's earnings per share
and drive shareholder value.'

For further information please contact:

Patrick Jolly,
Chief Executive,
Findel plc
Tel: 01943 864686

David Dutton
Group Finance Director
Findel plc
01943 864686

Keith Chapman,
Chairman, Findel plc
Tel: 01943 864686

Jonathon Brill/Billy Clegg,
Financial Dynamics
Tel: 020 7269 7170

This information is provided by RNS
The company news service from the London Stock Exchange

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