Bottom Line: Tie Rack reward for the faithful

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WATCH out for Roy Bishko sporting a tie showing a large Pink Panther playing the saxophone; that will mean he is really happy with his results. Yesterday, his tie was festooned with trumpets, but he stressed they were small and made only a little noise.

Given that Tie Rack interim profits almost tripled to pounds 872,000, that seems modest. But the second half accounts for more than 90 per cent of profits and he is being cautious ahead of the key Christmas period. So far in the second half, the increase in like- for-like sales has declined slightly from the 4 per cent enjoyed in the first - albeit against unusually good comparatives. France, which suffered a drop in like-for- like sales in the first six months, remains difficult. And it still has to demonstrate that the US - still saddled with expensive leases from the 1980s expansion - can be brought back into profits.

Such caveats aside, yesterday's results are ample reward for the faith of investors, who have pushed the shares up more than 2.5 times faster than the market over the past year (although they have only just got back to where they were when it floated in the heady days of 1989).

Cash balances rose by almost pounds 6m to pounds 6.9m, despite a heavy investment programme that will absorb pounds 3m this year, and are likely to be more than pounds 9m by the year- end. Continued attention to detail - such as persuading suppliers to buy machines to sew loops on the backs of ties - means that it has been able to continue to push volumes up, despite the recession in most of its markets. While its cash position would support fast expansion, caution dictates that new openings will be limited to about 30 a year.

Christmas permitting, analysts are forecasting full-year profits of about pounds 6.6m, giving earnings of about 7.4p. That puts the shares, unchanged at 161p yesterday, on a premium 21.7 times earnings. The final dividend could be raised by as much as 25 per cent but, at 1.25p with no interim, is still too low to give much in the way of yield. While existing shareholders are unlikely to be disappointed, for others, it looks too late to buy.