Investment: Uno cuts dividend after pounds 1.7m loss

UNO, the furniture retailer that also controls the World of Leather stores, has cut its half year dividend after reporting a plunge into loss at the interim stage as sales continue to weaken.

Same-store sales in the 10 weeks since November are down by 30 per cent on the same period last year.

The company said that footfall at its stores had fallen sharply as customers demonstrated "an unwillingness to spend".

Losses reached pounds 1.7m in the six months to 7 November, compared with profits of pounds 0.4m last time. The interim payout was cut to 0.4p against 1.85p last year.

The weak figures pushed Uno's shares down 18 per cent to 33.5p. This values the company at pounds 6m and with the board holding more than 40 per cent of the shares has caused speculation about the future independence of the company.

Paul Rosenblatt, chairman and chief executive, said that Uno was "committed to remaining as a public company," but the group could seek a merger as a way of restoring value.

Although there was a net cash outflow of almost pounds 9m in the half, the company is expected to have net cash of around pounds 2m by the year end. The current share price is also underpinned by freehold property holdings .

Uno's problems are mainly sectoral. Furniture is probably the weakest part of the troubled retail sector, with fear of recession causing consumers to defer larger purchases. Uno is also up against strong sales comparisons last year.

Management has cut costs by pounds 4m and says a new head office, which combined Uno and World of Leather, will lead to efficiencies.

On SG Securities' reduced full-year profit forecast of pounds 1m, the shares trade on a forward rating of nine.

There could be value further out but there is no need to rush.