The jump in online sales mix from around 56% a year ago to 63% in FY17 is significant in showing Express Gifts’ rapid progress towards becoming a pure-play online business. New management confirms the strategy and meanwhile has drawn a line under legacy issues, while the balance sheet is adequate to deal with these and the operation’s development needs. We are materially raising our valuation to 324p and believe that, as Findel moves more fully online, there will be further upside to its revenue growth and, consequently, share price.
A key strategic moment
This is a significant moment for Findel’s (LON:FDL) investment case. Results and management changes both confirm Express as the predominant business. With online sales jumping to 63%, the pure-play online strategy has been clearly articulated. A full round of provisions draws a line under legacy issues such as the liability for past financial products. While the smaller Education business trades in a difficult market, a process of focus is set to bring benefits such as product sourcing synergies.
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