No Pain, No Gain: Armour is fighting back in a tough retail environment

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.

yourmoney@independent.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Arts and Entertainment
Buttoned up: Ryan Reynolds with Helen Mirren in ‘Woman in Gold’
filmFor every box-office smash in his Hollywood career, there's always been a misconceived let-down. Now he says it's time for a reboot
News
people
News
Actress Julianne Moore wins the Best Actress in a Leading Role Award for 'Still Alice' during the 87th Annual Academy Awards in Hollywood, California
people
Sport
Ross Barkley
footballPaul Scholes says it's time for the Everton playmaker to step up and seize the England No 10 shirt
News
'We will fix it': mice in the 1970s children’s programme Bagpuss
science
Life and Style
2 Karl Lagerfeld and Choupette
fashion
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Graduate Recruitment Resourcer

    £20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

    Recruitment Genius: Telesales Executive - OTE £32,000+

    £18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...

    Ashdown Group: Marketing Manager - B2B, Corporate - City, London

    £45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Neil Pavier: Commercial Analyst

    £50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

    Day In a Page

    War with Isis: Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria's capital

    War with Isis

    Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria
    Scientists develop mechanical spring-loaded leg brace to improve walking

    A spring in your step?

    Scientists develop mechanical leg brace to help take a load off
    Peter Ackroyd on Alfred Hitchcock: How London shaped the director's art and obsessions

    Peter Ackroyd on Alfred Hitchcock

    Ackroyd has devoted his literary career to chronicling the capital and its characters. He tells John Walsh why he chose the master of suspense as his latest subject
    Ryan Reynolds interview: The actor is branching out with Nazi art-theft drama Woman in Gold

    Ryan Reynolds branches out in Woman in Gold

    For every box-office smash in Ryan Reynolds' Hollywood career, there's always been a misconceived let-down. It's time for a rethink and a reboot, the actor tells James Mottram
    Why Robin Williams safeguarded himself against a morbid trend in advertising

    Stars safeguard against morbid advertising

    As film-makers and advertisers make increasing posthumous use of celebrities' images, some stars are finding new ways of ensuring that they rest in peace
    The UK horticulture industry is facing a skills crisis - but Great Dixter aims to change all that

    UK horticulture industry facing skills crisis

    Great Dixter manor house in East Sussex is encouraging people to work in the industry by offering three scholarships a year to students, as well as generous placements
    Hack Circus aims to turn the rule-abiding approach of TED talks on its head

    Hack Circus: Technology, art and learning

    Hack Circus aims to turn the rule-abiding approach of TED talks on its head. Rhodri Marsden meets mistress of ceremonies Leila Johnston
    Sevenoaks is split over much-delayed decision on controversial grammar school annexe

    Sevenoaks split over grammar school annexe

    If Weald of Kent Grammar School is given the go-ahead for an annexe in leafy Sevenoaks, it will be the first selective state school to open in 50 years
    10 best compact cameras

    A look through the lens: 10 best compact cameras

    If your smartphone won’t quite cut it, it’s time to invest in a new portable gadget
    Paul Scholes column: Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now

    Paul Scholes column

    Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now
    Why Michael Carrick is still proving an enigma for England

    Why Carrick is still proving an enigma for England

    Manchester United's talented midfielder has played international football for almost 14 years yet, frustratingly, has won only 32 caps, says Sam Wallace
    Tracey Neville: The netball coach who is just as busy as her brothers, Gary and Phil

    Tracey Neville is just as busy as her brothers, Gary and Phil

    The former player on how she is finding time to coach both Manchester Thunder in the Superleague and England in this year's World Cup
    General Election 2015: The masterminds behind the scenes

    The masterminds behind the election

    How do you get your party leader to embrace a message and then stick to it? By employing these people
    Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

    Machine Gun America

    The amusement park where teenagers go to shoot a huge range of automatic weapons
    The ethics of pet food: Why are we are so selective in how we show animals our love?

    The ethics of pet food

    Why are we are so selective in how we show animals our love?