10 September 2011 – trading update

Turnover for the 6 months ended 31 July 2011 was approximately £16.7m, down  from £19.1m a year earlier.  However, gross margins improved following more favourable currency rates and shipping costs.  Profit before tax in the first half is likely to be below last year but higher than two years ago.  This puts the figure at broadly £600k.  The current market capitalisation is £4.56m so this is still a good level of profitability given current trading conditions.

Although the company has said that it currently expects pofit before tax for the full year to 31 January 2012 to be behind the prior year, it has a habit of playing down prospects.  The interim dividend looks likely to be maintained and earnings per share figures for the current year will be boosted by relatively recent share buybacks.  There is scope for considerable upside, especially given the Olympics next year, but in the short term there appears to be a lack of interest meaning that the share price is likely to remain subdued.  There are better opportunities elsewhere so for now we rate the shares as a HOLD.