Laura Ashley recovery stalls

Laura Ashley shares collapsed yesterday as Ann Iverson, chief executive, admitted that her recovery programme for the fashion and fabrics group had run into trouble this year.

The shares plunged by 41p to 104p as the company issued a profit warning for the current year. A year ago the shares were trading at double the current level, buoyed by hopes that Ms Iverson could dramatically transform the group's fortunes.

Latest results for the year to 25 January did show the recovery well on course with profits before tax up 57 per cent from pounds 10.3m to pounds 16.2m and a doubling of the dividend to 1p. With group sales running at over pounds 300m a year, there were hopes among City analysts that this year profits might have been in the pounds 22m to pounds 24m range.

However, Ms Iverson has had to warn that profits for the current year, although ahead of last year "will be below current market expectations". Analysts quickly trimmed their forecasts back to between pounds 18m and pounds 19m. This implies earnings per share might only edge up from last year's 4.3p to around 5p a share.

Gross margins on sales remain stuck at around 5 per cent and the hope of margins in double figures will have to wait until 1998/99. Ms Iverson disclosed that delays in store openings meant her own "overly aggressive sales targets" for garment ranges were not being met and the company would have to cut prices to shift unsold merchandise. Latest accounts show stock levels shot up from pounds 66.6m to pounds 93.1m at the end of last year.

Ms Iverson, who took on the chief executive's role in June 1995 with a potential incentive package worth pounds 5m, still remains confident she is on the right track. In the North American market, which she describes as still the greatest vehicle for growth and profit improvement, there was a 26 per cent rise in selling space. But the expansion has still to make an impact on sales, which fell 9 per cent during the year. The UK operations showed a healthier 8 per cent sales increase but on the Continent turnover also dipped - affected partly by the strength of sterling.

Strong sterling wiped pounds 800,000 off profits last year. At today's even higher level it would have knocked another pounds 1.1m off the total. New store openings strongly feature in the current year.

Comment, page 23

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

‘We won’t stop until Syria is back to normal’

Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

The inside story of how Bill Clinton built a $2bn global foundation...

... and how it may undermine Hillary's chances in 2016
12 best olive oils

Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back