Bottom Line: No-frills management needed at Laura Ashley

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GIVEN Laura Ashley's history, it was entirely appropriate that Jim Maxmin should take time out of his final results briefing as the company's chief executive to extol the virtues of businesses that prosper with no management at all.

Even before Tuesday's announcement of Dr Maxmin's departure due to a dispute about brand investment, management skill has been in short supply at Laura Ashley.

The prosperity, however, has been sadly lacking. The group's net assets at the end of January were pounds 86.1m, more or less where they were when the group floated in December 1985, if the pounds 30m rescue funds injected by Aeon in 1990 are included. Last year's earnings of 0.45p a share are a mere fraction of the 6.29p achieved in its first year as a public company, the dividend disappeared four years ago, and its share price is more than 40 per cent below the 135p offer price, even after yesterday's 2p rise to 79p.

Little of the blame can, of course, be laid at Dr Maxmin's door. The company he inherited in 1991 was still suffering from the legacy of Sir Bernard Ashley, co- founder and chairman until last year, whose style was so laissez-faire it could hardly be described as management. But what Dr Maxmin has achieved in his two-and-a- half year tenure is far from clear.

Profits, excluding exceptional charges, are just pounds 300,000 above where they were when he joined. The US business became a bigger headache and, while he claims it has stabilised, that has yet to be proved in the figures. Returns in Britain have improved, but the sales decline this year is a worrying sign, no matter how much the group protests that margin improvement has kept profits intact.

Earnings forecasts range from 2.5p to 3p, depending on where the tax charge settles, which should allow at least a 0.5p dividend. But that still leaves it on a dizzy multiple of at least 26. Sell.