10 June 2016 – final results

The group has announced its final results for the year to 31 March and these have come in as expected following the disappointing trading statement of 8 April.  Revenues for the year rose 5.3% to £188.0m (2015: £178.6m) whilst pre-tax profits before exceptional items fell to £10.6m (2015: £12.4m) and earnings per share on the same basis were 18.3p (2015: 20.7p).  Net cash at the year end was £12.4m.  Clearly the company has suffered from the difficult trading conditions that have been impacting on the retail sector in general as seen from the disappointing performances from both Marks & Spencer and Next.  However, the group is taking action to cope with these challenging markets and believes that its position as a niche retailer focused on the mature female puts it in a strong position for future growth.  As a sign of the group’s confidence in the future the total dividend for the year was increased by 5% to 7.14p (2015: 6.80p), putting the shares on a yield of 5.5%.  Trading at the start of the new financial year has continued to be tough due to poor weather conditions but pre-tax profits for the year could increase to £12.5m for earnings per share of 20p.  A prospective p/e ratio of just 6.5x looks far too low and we re-iterate our recommendation of buy with a share price target of 200p.  BUY.