Allders looks for pounds 200m market capitalisation

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The Independent Online
ALLDERS, the department store and duty-free retailer, is aiming for a market capitalisation close to pounds 200m, the top end of analysts' forecasts, when it is floated later this month, writes Heather Connon.

In its pathfinder prospectus, published yesterday, it estimates that it made pounds 23m profit last year before pounds 8m exceptional charges for property write-downs and flotation costs, on sales of pounds 685m. That was a 50 per cent improvement on the pounds 15.3m achieved the previous year. Some pounds 1.6m of the increase was due to the fact that its accounts for 1993 covered 53 weeks instead of 52.

Allders will raise about pounds 85m of new funds from the flotation, most of which will be used to pay back the pounds 90m of debt incurred when it was bought out from Hanson in 1989. But Harvey Lipsith, chief executive, said that after the float the group would borrow up to 20 per cent of its net assets.

Sales in the department stores have been flat for three years despite the opening of two stores and six out- of-town centres. Mr Lipsith attributed this to the group's strategy of concentrating on profits rather than sales. He is confident that it will benefit from the recovery in the housing market - two-thirds of its sales are household goods.