Country Casuals makes a smart first-half advance

Country Casuals, the upmarket women's wear retailer, yesterday reported its maiden results since flotation with a 42 per cent jump in first-half profits.

The taxable surplus is up by 42 per cent to pounds 405,000 for the period to 25 July, on virtually unchanged turnover of pounds 15m. Earnings per share climbed by a third to 1.88p. There is no dividend.

Country Casuals, whose products are aimed at affluent women between the ages of 35 and 55, was launched on the stock market in June, valued at pounds 22m. The shares, placed at 130p each, closed up 1p at 122p.

John Shannon, chairman, said that the profits growth stemmed from improved margins and market share.

'Over the past three years Country Casuals has invested in the production of garments with a higher added value content. It has also structured the distribution and marketing so that the consumer is encouraged to purchase during the season and not to wait until sale time,' he said.

As a result, it was selling the bulk of its clothes at full prices, while the amount having to be off- loaded during sales had been reduced sharply.

Thanks to higher cash generation, a pounds 223,000 interest charge was turned round to pounds 12,000 income during the first half. Net cash at the end of July amounted to pounds 2.5m after taking the flotation proceeds into account.

The company has launched a new leisurewear label - Diffusion Sport - to complement its existing range of more formal clothes that sell under the Country Casuals brand.

The group said that the launch had been well received and was attracting younger women. The range was introduced into 70 of the group's 156 outlets, but is to be extended into more shops over the next few months.

However, the expansion plans will not be completed until next spring as it takes several months to design and source the products.

Despite weak economic conditions, the group said that it was gaining market share. Group sales were ahead by 12 per cent in September compared with the same time last year. City analysts expect taxable profits to jump from pounds 2m to about pounds 2.5m for the full year.

(Photograph omitted)