Amber Day shares soar: New chairman looks to second half with confidence

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SHARES in Amber Day, the discount retailer that was badly damaged last year by whispers of financial irregularity, soared yesterday as the new chairman, Stacey Ellis, gave the business a clean bill of health.

Mr Ellis, who was appointed chairman on 1 January, replacing Philip Green, said: 'I have not heard a dickie-bird from the Serious Fraud Office or the Department of Trade and Industry since I joined.

'I have been increasingly impressed, in the three months since I joined, of the group's strengths and prospects and look forward with confidence to the second half of this year and beyond.'

The shares rose 5p to 79p as Amber Day reported interim profits before tax of pounds 4.5m, up from a restated loss of pounds 6.3m last time. The dividend was held at 1.1p 'in view of the strong financial position and growth prospects'.

Mr Stacey took the unusual step of publishing a half-year balance sheet and cash-flow statement to help restore investor confidence in the group. He said he hoped to appoint a second non-executive director within the next month and a chief executive by the summer.

Mr Green was ousted as chairman and chief executive with a pounds 1.1m pay- off last September after the group, which owns the What Everyone Wants chain, reported disappointing results.

The shares had been earlier depressed by a number of newspaper stories about Mr Green, his deals and his business associates. Later came reports of investigations into the company by the Serious Fraud Office - subsequently denied - and the Department of Trade and Industry.

Operating profits in the 26 weeks to 30 January fell from pounds 7.5m to pounds 5.9m. However, the entire decline was due to an unusual pounds 2m profit on a single video tapes deal achieved in the prior year, according to David Thompson, finance director.

Sales at WEW, after stripping out the benefit of the two new store openings, increased by 9 per cent. That compares to like-for-like declines of 7 and 11 per cent in the previous two halves. Total sales grew 17 per cent to pounds 55.7m.

Although the gross margin fell 5 per cent, the underlying fall was 1 per cent, Mr Thompson reported. The videos deal and other one-off factors produced the distortion.

New products, including CD systems priced at pounds 79.99 and hi-fi systems at pounds 39.99, helped to produce the sales gain. WEW started to stock branded toys including computer games. It now plans to introduce a new merchandise software system by next year.