Allders sees signs of tenuous recovery

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The Independent Online
SHOPPERS are returning to the high street and travellers to duty- free shops, but the recovery in both is tenuous, according to Allders, which yesterday announced its maiden dividend as a public company.

'There are signs of recovery, particularly in the South-east and in the housing market - it is tenuous, but it is having an effect on our business,' Harvey Lipsith, chief executive, said. He estimates that two-thirds of sales through Allders department stores depend on the housing market.

In airports, where it operates duty-free and other outlets both here and abroad, there has been an increase in the number of travellers and in their spending.

The improvement helped the group to an pounds 11.1m profit before tax in the six months to 31 March, up from pounds 5.9m last time. The results were distorted by the flotation, which raised pounds 75m. Adjusting for that, profits would have risen from pounds 9.9m to pounds 11.7m.

Department store operating profits were flat at pounds 10m on sales 3.8 per cent ahead at pounds 160.9m. But the previous year benefited from an extra week's trading and John Collyer, finance director, said the underlying increases in sales and profits were 6.9 per cent and 16 per cent respectively.

Profits from airport retailing were pounds 700,000, but that masked a pounds 2.5m loss in North America as the group provided pounds 700,000 for the ending of a contract in San Francisco. Cigarette sales in its Canadian outlets also suffered as the government cut taxes to discourage smuggling.

Pro forma earnings per share were 9p, compared with 7.7p, and the interim dividend is 2.2p. The group had promised that a third of its payment would be made at the half year, indicating a total of 6.6p.