No Pain, No Gain: Armour is fighting back in a tough retail environment
Saturday 04 December 2010
Are we due for yet another Santa Claus rally? In most years in the run-up to Christmas and the New Year the stock market enjoys an exuberant run. I believe it will do so once again, despite the hesitancy created by the multitude of problems confronting the eurozone.
When I was The Independent's stock market reporter the upsurge was an accepted event. Many investors reaped handsome presents by banking on a sharp advance over the festive season. Indeed I cannot recall a single occasion when the boom did not materialise.
The Investors Chronicle has concluded that there has been a festive rally in 24 of the past 28 years. So it looks as though the odds must be heavily stacked in favour of yet another rewarding round.
The flies in the ointment are the fall-out from the euroland crisis and possible Far Eastern tension. EU officials happily waffle on that the Irish and Greek disasters will not be repeated, but further bailouts appear highly likely. The pre-Christmas sight of another looming bankruptcy could wipe out any stock market cheer.
Why is Christmas so often a merry hunting time for investors? One factor is that once some of the City's top guns depart for their festive break their deputies are more inclined to take the path of least resistance and let prices run. There is also the impact of year-end institutional window-dressing as fund managers strive to maximise their performance bonuses.
But by far the most important influence is the continuous fall in volume as the holiday run-down develops. It is not unusual for fund managers, as well as dealers and traders, to shut up shop as Christmas approaches. Their no-show more or less leaves the field clear for small, private investors. And with individual investors likely to be buyers (inspired by Christmas and New Year share tips) they have a disproportionate influence and, in very low volume, succeed in pushing shares higher.
As investors hope for another festive killing, I wonder about the Christmas atmosphere prevailing in some of the nation's boardrooms, particularly small caps. It is likely to be rather subdued. Last week I heard George Dexter, chief executive of the Armour Group, discuss his problems: "This is not a great time to be running a quoted small cap," he said, citing uncertainties facing his retail customers.
At the pre-tax level, Armour produced profits of £947,000 against £1.1m. No dividend is being paid. The shares, a few years ago around 60p, are now 9p, giving a £6.2m capitalisation.
I have sympathy with Armour and similar companies. Uncertainty reigns in many markets. Armour, which once owned Tizer, the famed soft drink, is now engaged in consumer electronics such as in-car communications and home entertainment. It has also spread into such areas as TV stands and office furniture, and is looking at adding lighting to its activities. Clearly its car and home electrical products – hardly must-have offerings in these depressed times – could be major casualties of next year's widely forecast retail recession. Indeed Mr Dexter fears 2011 could be exceptionally traumatic for many retailers and their suppliers.
But little Armour is fighting back. It has become Europe's biggest TV stand group, and has even established a factory in China to make them. Its determination to keep rolling forward is reflected in its search for new products.
And it nurses high hopes for its latest creation – an internet radio capable of linking to 10,000 stations and podcasts. The Q2 internet radio does not require displays, dials or buttons. It is made in China. Armour is selling its newest product, retail price is £90, through the internet and selected retailers. So far it has sold 500 sets, and when I met Mr Dexter it had only a few left, although 4,000 were then on the high seas.
Armour is one of the companies in the stable of the serial small cap investor Bob Morton, who is chairman. He echoes Mr Dexter's caution. "The economic outlook remains uncertain and challenging in the near term in our core UK markets," he says. And with Armour finding the future difficult to predict, the company's stockbroker, FinnCap, has slashed its current year's adjusted profits forecast from £1.1m to a mere £200,000.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Questions of Cash: Bupa costs bore no relation to what I'd been quoted
Problem gambling: Amid heavy advertising and a surge in remote sports betting, more and more 16 to 24-year-olds are now seen as 'at risk'
The HiFX guide to managing corporate foreign exchange and international payments
How to start your own internet business
Be warned of the dirty tricks the bailiffs pull
- 1 Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
- 2 The secret report that helps Israel hide facts
- 3 Is Ebola coming to Britain? UK health officials issue warning to doctors as outbreak fears grow
- 4 Richard Dawkins says 'date rape is bad, stranger rape is worse' on Twitter
- 5 Danish TV reporter is all business up top, all party down below
The secret report that helps Israel hide facts
A day in the life of Vladimir Putin: The dictator in his labyrinth
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Boozy, ignorant, intolerant, but very polite – Britain as others see us
Were 'Poor Doors' added to mixed developments so wealthy residents don't have to go in alongside social housing tenants?
- < Previous
- Next >
iJobs Money & Business
£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...
£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...
£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...
£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...
Day In a Page
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000