Bottom Line: Black but not blue

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The Independent Online
SHARES in Peter Black, supplier of toiletries and shoes to Marks & Spencer, were unchanged at 282p yesterday. But in light of yesterday's sharp slip in share prices overall, their resilient performance was noticeably positive.

Black revealed impressive interim results for the half-year to 4 December. Turnover rose 12 per cent to pounds 68.6m and pre-tax profits jumped 22 per cent to pounds 7m. Thanks to operational efficiencies generated by capital investment, the operating profit margin increased from 10 to 10.5 per cent.

Earnings per share grew to 8.59p from 7.05p and the interim dividend was lifted by 20 per cent from 0.93p to 1.12p.

This represents a good recovery from a recession that reduced profits by 40 per cent. The company is well positioned in shoes and toiletries with products M&S is keen to promote. The retailer's market share in shoes and toiletries is less than 10 per cent, compared with 30 per cent or more for some more mature clothing ranges.

And with further growth likely for Black's vitamins and organic drugs business (where it produces Natracalm and Natrasleep), the company is on course to make record profits this year of perhaps pounds 12m.

Black shares have doubled in little more than a year and have outperformed the market average by 35 per cent over the past 12 months. The stock is currently trading at an optimistic 20 times full-year earnings estimates. The yield is an ungenerous 1.9 per cent. If you are not in already you have probably missed the boat, but the long term looks sound.

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