Laura Ashley recovery stalls
Friday 25 April 1997
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
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...