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 BBC election debate: The one photo that summed up the whole 90-minute leaders debate
- 2 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 3 18th century sex toy found in 'toilet of sword fighting school' in Poland
- 4 'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
- 5 Rebecca Francis accuses Ricky Gervais of using 'influence' to target female hunters after receiving barrage of death threats
General Election 2015: David Cameron catching up in polls – but he badly needs a clear lead
South Africa xenophobic attacks: Shops looted and violence on streets of Johannesburg as foreigners are forced to hide in police stations
Earthworms rain down from skies over Norway, puzzling scientists
18th century sex toy found in 'toilet of sword fighting school' in Poland
'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
Russian warships in English Channel 'to conduct anti-aircraft and anti-submarine military drills'
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...