Investment: Blacks shrugs off the gloom
Tuesday 20 October 1998
Faced with falling volumes, price competition will intensify and the strategy of using long-term property leases with rents that don't fall - a bonus when trading is buoyant - will mean a bloodbath.
As you'd expect, Blacks' chairman and chief executive Simon Bentley shrugs off this scenario. He claims that, far from being ex-growth, there is scope for the big five sportswear chains, including Blacks, to increase their market share from the current 30 per cent to 50 per cent.
True, Blacks' results in the six months to August support his case. Profits up 12 per cent to pounds 6m in a difficult market was a creditable performance. Like-for-like sales up 8 per cent in September is another eye-catching statistic.
Nevertheless, caution looks prudent. First-half sales grew at nearly three times the rate of profits, suggesting it is getting harder to shift stock. Gross margins of 47.8 per cent, down nearly a percentage point in the first half, look vulnerable if things get really tough.
Consensus profit forecasts for the full year to January give a lowly forward multiple of 6 at 197p, but the spread of brokers' forecasts for 1999-2000 is a yawning pounds 13m-pounds 18m and underlines the market's uncertainty. The shares didn't budge yesterday and only the very brave will take the plunge at this point. Sell.
- 1 Fifty Shades of Grey movie trailer released: First look at Jamie Dornan as Christian Grey
- 2 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 3 50 books for students to read this summer: From Ernest Hemingway to Gillian Flynn
- 4 Students offered grants if they tweet pro-Israeli propaganda
- 5 Israel has discovered that it's no longer so easy to get away with murder in the age of social media
Israel-Gaza conflict: Israeli targeting policy under scrutiny after shellfire hits a mother and child, a school full of refugees and a doctor’s home
Peaches Geldof cause of death: Socialite had taken fatal dose of heroin after years of addiction, inquest concludes
Peaches Geldof: Her final day – and her fatal decision
Students offered grants if they tweet pro-Israeli propaganda
Iraq crisis: Isis orders Mosul shop keepers to cover mannequins
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
iJobs Money & Business
£18000 - £20000 per annum + OTE £25K: SThree: SThree Group has been well estab...
competitive: Progressive Recruitment: This really is a fantastic chance to joi...
£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...
£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...