// Studio’s revenue flat for the 26 weeks ending September 27
// Adjusted pre-tax profit up 12%, but pre-tax profit from continuing operations plunges 83%
// Post half-year period, Studio enters conditional agreement to sell its Findel Education arm for £50m
Online retailer Studio has revealed mixed results in its half-year trading update, while also announcing the sale of its education arm for £50 million.
Studio said it entered a conditional agreement to sell its Findel Education unit to Wakefield City Council, in a deal that the company said represented a multiple of 10.3 times 2019 financial year adjusted EBITDA.
The proceeds of the sale would be used to make a voluntary payment to Studio’s defined benefit pension fund, while the remainder would be used to plug its debt.
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Completion of the sale – being made to Wakefield Council in its capacity as the lead authority of the joint committee known as the Yorkshire Purchasing Organisation – is still subject to shareholder approval and clearance from the CMA.
“Education has undergone a digital transformation over the past two years, and we are confident that YPO represents a natural new home for the business,” Studio chief executive Phil Maudsley said.
“We believe this transaction is in the best interests of all Studio stakeholders, allowing us to focus on driving further growth within our core Studio value retail business.”
Studio revealed the sale alongside its half-year results, which saw revenues largely unchanged year-on-year while PPI claims had an effect on profits.
For the 26-week period ending September 27, the online retailer said total group revenue was flat year-on-year at £228.1 million.
However, revenue from continuing operations edged up three per cent year-on-year to £181.3 million.
Adjusted pre-tax profit for the group surged 12 per cent year-on-year to £13 million, but profit before tax from continuing operations plunged 83 per cent year-on-year to £2.6 million after recognition of additional provision PPI claims of an estimated £7.9 million that was announced in September.
Meanwhile, Studio’s core net debt was reduced to £70.8 million at the half-year mark, compared to the £80.9 million it had this time last year.
Looking ahead, the online retailer said it remained “encouraged” by its medium-term prospects, especially after it welcomed record numbers of customers over the Black Friday weekend.
Studio said it a record level of online sessions in a single day – 781,000 on Black Friday – while daily dispatches exceeded 100,000 parcels for the first time ever, and product sales in the last 11 weeks has been up 10 per cent on prior year.
The half-year period saw Studio undergo a simplification of the business through a name change to Studio Retail Group in July 2019.
As a result, it confirmed today that it appointed managing diretor Paul Kendrick to the board as an executive director.
Kendrick, who will continue in his current role of managing director, first joined Studio in May 2016 when it was then known as Findel.
He was initially commercial and deputy managing director before being promoted to his current role in April 2017.