Challenges ahead, but exciting plans for 2008 says chairman.

Flying Brands says it will use a £2m investment programme to turn around its fortunes in 2008.

After suffering at the hands of a tough retail market, chairman Tim Trotter said the Jersey-based mail order group's activities will include acceleration of the transformation of the business from a pure catalogue retailer into a multi-channel operation; and expansion of Greetings Direct into the USA.

Flying Brands reported a 31% slump in full-year profits and cut its dividend for 2007 by 32% for the 52 weeks to December 28, 2007.

Profit before tax fell to £3.6m from £5.3m in 2006.

Mr Trotter said: "Not only did we have to contend with deteriorating general retail market conditions but we were also beset with a series of one-off issues and a general decline in the trading performance in the second half of the year on all our main trading divisions."

Performance was also hit by costs incurred by its decision not to proceed with the purchase of a privately owned home shopping retailer at the start of this year.

Sales over the 52 weeks rose 9% to £46.3m thanks to the acquisition of Greetings Direct, but like-for-like sales plummeted 13%.

The group said it has made a mixed start to the current financial year, with strength at the garden division cancelled by a weak performance for Flying Flowers up to Mother's Day and for Greetings Direct in the UK.

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