Alba looks in better shape

Click to follow
The Independent Online
John Harris, the chairman of Alba, is sounding upbeat despite a difficult year. Alba's speciality is selling cheap, well-known electrical brands like Bush, Alba, Goodmans and Hinari. With rival Amstrad increasingly shifting from televisions and videos to mail-order computers and telephones, Alba's main competition at the cheaper end of the high street is now lesser-known Korean brands.

The group is also proving increasingly attractive to retailers: Argos represents around a fifth of sales and its televisions and videos are making increasing inroads into supermarkets like Asda and Sainsbury's Savacentre.

One reason for Alba's success is its product offering, including a huge range of around 1,500 items. Bush televisions - in new wide-screen formats and fashionable acid colours - and hand-held "Dirt Devil" vacuum cleaners have proved popular.

Markets are still far from easy. Economic recession in France was to blame for the fall in profits from pounds 10.4m to pounds 9.8m in the year to March and consumers in the UK are still apparently reluctant to part with their building society windfalls.

There is also the uncertainty over the effect of Labour's first Budget next week on consumer confidence. The test will be the all-important second half, which includes the key Christmas trading season.

Even so, Alba already looks in better shape. It has has cut back its French business to around 3 per cent of sales from 10 per cent before and has closed a clutch of warehouses in the UK.

There is also plenty of potential to improve the recent Roadstar acquisition, which adds new products in audio in-car entertainment, and create a single European distribution and warehousing hub. On 182.5p, up 4.5p, the group's shares are on a forward p/e ratio of 11. About right.