Heal's has a lot in store: The Investment Column
Wednesday 19 March 1997
The shares have now been priced at 175p, valuing Heal's at pounds 21.3m. On earnings last year of 12.27p, that puts the shares on a historic multiple of 14, or 17.4 after adjustments, a discount to the stores sector.
One drawback for smaller punters is that this is only a placing so investors not linked to a broker can only buy shares after dealings start on 24 March. Another is that Heal's is coming to the market in a period of some uncertainty. The marathon election campaign is unsettling and whichever party wins, the stock market is expecting higher interest rates, which could affect sales of higher ticket items, such as beds and sofas. There have also been signs of a slowdown in some parts of the retail market in recent months.
Against that is the prospect of windfall bonuses from the Halifax, Woolwich and other mutual society flotations. Heal's ought to benefit from this.
The trick for the company will be to expand its store portfolio from its base of three into a larger chain without drifting downwards into the mass market. The company is raising pounds 1.8m to fund expansion and is looking at around 10 stores in total, which looks about right. So far Heal's has two stores in London and one in Guildford, so there is plenty of room for growth in the UK before moving into buoyant overseas retail markets like Dublin.
Heal's is always going to a cyclical company whose fortunes are linked to the housing market. And competition will come not just from Habitat and the Conran Shop, but department stores such as the mighty John Lewis. So there are threats, but with a strong brand name, the competitively priced shares are still worth a look.
- 1 Howard Jacobson: Let's see the 'criticism' of Israel for what it really is
- 2 Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
- 3 Belgium fan Axelle Despiegelaere lands L'Oreal campaign after World Cup viral photo
- 4 Britney Spears sings 'Alien' without Auto-Tune in embarrassingly brilliant leaked audio clip
- 5 PornHub begs users to stop uploading video clips of Brazil getting beaten 7-1
Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
Instagram of US airport security chiefs: Lipstick knives and IED training kits among items seized
‘Ryan Gosling got someone pregnant and it's not me. Brazil you think you’re devastated…’
Israel-Palestine crisis: ‘We just want it to end… We don’t deserve to live like this’
Israel-Palestine crisis: Eight killed in Gaza Strip cafe while watching World Cup semi-final
Sustained immigration has not harmed Britons' employment, say government advisers
Australia facing international condemnation after turning around Sri Lankans at sea
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
There’s a nasty smell in the political air – and it’s coming from the Tories
Vanessa Feltz criticises 'vile' reaction to Rolf Harris allegations
iJobs Money & Business
£60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...
£60000 per annum: Harrington Starr: A leading provider in investment managemen...
£600 - £700 per day: Harrington Starr: AVS, JVS Openlink Endur Developer JVS, ...
£30000 per annum: Harrington Starr: A global leader in trading platforms and e...