FTSE in-depth: Kitbag is key to Findel troubles
Roger Siddle should pay heed to lyrics of the famous First World War marching song and 'pack up his troubles in his old kit-bag and smile, smile, smile'.
Foster: The Footsie just kept its head above water.
The respected boss of accident-prone retailer Findel said at a results presentation yesterday that he is on track to see the shares triple in three years.
He also intimated he would consider floating off Kitbag, the group's online retailer of sportswear and official football kits.
Separately valued at about £120m and worth at least 7p a share, Kitbag looks to be a hidden jewel in its crown considering the current value of the entire group is about £106m.
Major shareholders would definitely support its demerger. Let's face it, anything to see the share price move north after a disastrous year.
The prospect of a Kitbag flotation and notice of in-line results helped the shares add 1.17p, or 22pc, to 6.37p. Still below the price at which £81m was raised in March from investors following the discovery of accounting irregularities at the education supplies division.
A five-year refinancing deal to help fund a back-to-basics recovery also had to be agreed with bankers.
The enthusiasm shown for other online retailers by investors of late, makes it a nobrainer for the Findel board to soon decide to let Kitbag go it alone.
On Monday it announced a four-year deal to manage the new UEFA Champions League online store for Europe and Asia. It already manages the online retail operations for several European clubs, including Barcelona, Manchester United and Real Madrid.
Kitbag last year had revenues of £58m, up from £48m, and made operating profits of £1.87m, up 9%.
Findel does now look a decent recovery play. Siddle put his money where his mouth is in March, forking out £400,000 on 4.7m shares at 8.53p, while director David Sugden spent £50,000 on 586,166 shares at the same price.
Mike Ashley's Sports Direct advanced 6.7p to 227.70p, with buyers still nibbling away after Goldman Sachs last week lifted its target price for the sports retailer to 280p from 207p.
The Footsie just kept its head above water with a gain of 1.49 points to 5,864.65, helped by an opening 40 point-plus rise on Wall Street.
Traders in New York closed short positions as they awaited the content of Federal Reserve chairman Ben Bernanke's speech at the International Monetary Conference in Atlanta, wanting to hear what the Fed's reaction will be to the downturn in the world's largest economy.
Motor insurer Admiral accelerated 28p to 1737p. Buyers have been back in the driving seat following a recent decision by The Legal Services Board against a total ban on referral fees.
Hoping to stave off relegation from the Footsie, TUI Travel edged up 0.3p to 225.30p. The shares have fallen 5% over the past three months amid concerns about the impact of civil unrest in holiday destinations, Egypt and Tunisia.
Should TUI fall through the trap-door, Tate & Lyle (8p better at 656p) is favourite to take its place, appearing in the elite index for the first time since March 2009.
Synergy Health jumped 45p to 925p following in-line results which included a 20pc increase in the dividend to 15.84p. Charles Stanley Securities reiterated its buy recommendation and target price of 1,050p.
Ukrainian iron ore producer Ferrexpo climbed 19.10p to 470.70p on vague talk of a bid approach from mining giant BHP Billiton, 16p up at 2342p. Brazil's Vale and giant steel producer Mittal have also been mentioned in the same breath as Ferrexpo this year.
News that mining gurus Jim Mellon and his business pal Stephen Dattels have bought into the company via their Ferrum Resources helped Emerging Metals put on 0.175p to 2.9p.
They have acquired an interest in six licenses in an emerging iron ore province in Cameroon, West Africa. There is potential for discovery and development of world class iron ore deposits and entrepreneur Mellon is said to be excited about EM's prospects.
Zoo Digital rose 10p to 54p after announcing its first contract through its relationship with Multi Packaging Solutions Inc, for application of its core products outside the core filmed entertainment sector. It applies to its 2 ZOO software tools for the international packaging market, for an international videogames publisher.
AIM-listed promotional marketing and technology group Altitude added 2.75p at 34.50p on a Killik Special Situations Fund recommendation. It views the company as a cash-rich software business, targeting highgrowth niche markets with a disruptive technology.
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