29 July 2011 – interim results

Results for the 26 weeks to 1 July 2011 have been released.  Revenue from the continuing businesses was £15.77m (2010: £15.85m) and a loss before tax of £0.21m was suffered compared with a profit of £1.39m in 2010.  This excluded one-off items.  The loss from Dealtastic including the write off of the initial investment amounts to £1.49m giving a loss for the period of £1.97m compared to a profit a year earlier of £0.40m.  The basic loss per share was 6.04p versus basic earnings per share of 1.47p in 2010.  The gross cash balance at the end of the half-year was £0.07m (2009: £1.15m) with bank loans of £1.89m (2010: £1.36m).  There is also an outstanding loan note of £1.49m (2010: £1.45m) relating to the deferred consideration of Flowers Direct. Net debt at the period end was £3.31m (2010: £1.66m).

It was particularly disappointing to see that the interim dividend was scrapped and the depths which this niche player has reached highlights just how bad conditions are for the retail sector.  The current share price values the business at just £6.3m and there could be strong recovery over the longer term.  However, for the time being there are better opportunities elsewhere.  AVOID.