£210.1m market cap

243p last close

Findel is a multi-channel retailer operating across the business-to-consumer and business-to-business market places. It is a market-leading online value retailer and educational resource supplier in the UK.

Investment summary

Studio, Findel’s main customer-facing business, has delivered steady sales growth of c 3% in the 16 weeks to 19 July, against a tough prior year comparative and in line with company expectations. Education also continues to make good progress, albeit in the early part of the key ‘back to school’ season, with customers increasingly ordering online. We leave our assumptions and forecast two-year EPS CAGR of 7.3% unchanged, ahead of Studio’s peak trading period. We value the shares at 423p, a significant premium to the current share price.

Y/E Mar
Revenue (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2018A 479.6 46.6 26.8 25.9 9.4 18.3
2019A 506.8 50.9 28.8 26.5 9.2 9.4
2020E 535.5 53.6 30.0 28.9 8.4 6.1
2021E 557.6 56.3 31.7 30.5 8.0 5.5
Industry outlook

In the three months to April 2019, UK retail sales (excluding fuel) grew 5.1% y-o-y by volume and 5.2% by value. However, online sales rose 12.1% in the same three months y-o-y, creating additional tailwinds for Studio which trades at c 75% online. The squeeze on schools’ budgets continues to restrain the education supply sector.

Last updated on 25/07/2019
Share price graph
Balance sheet
Forecast net debt (£m) 236.6
Forecast gearing ratio (%) 351
Price performance
Actual (2.8) 42.9 (16.8)
Relative* (3.9) 42.2 (14.5)
52-week high/low 302.0p/154.0p
*% relative to local index
Key management
Ian Burke Chairman
Philip Maudsley CEO
Stuart Caldwell CFO

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