The Investment column: Burton still needs to build sales

John Hoerner, the amiable American who has turned around Burton, is fond of saying that just because the group's recovery is more or less complete, it does not mean that there is nothing left to play for. "This is not the beginning of the end, it is the end of the beginning," is the way he puts it. In a way his comments echo Archie Norman's "from recovery to breakout" slogan at Asda, another corporate basket case that has been successfully rejuvenated.

The Burton group has been stabilised for some time now with price-cutting a thing of the past and margins by and large restored. Though margins are still poor at Burton Menswear, Principles and Top Man, the challenge has moved on to building sales.

If the good run of Burton shares is to continue, however, Burton needs to improve turnover growth more than it has done.

This made yesterday's trading statement at Burton's AGM interesting reading. Total group sales in the 20 weeks to 18 January were 11.1 per cent ahead of the same period last year. Of this, 3.8 percentage points were contributed by the recent mail order acquisitions Innovations and Racing Green. Though no specific figure was issued on like-for-like sales increases, it is estimated at around 6.5 per cent.

While Christmas and new year trading was good in the womenswear multiples and in Debenhams, menswear sales were less impressive. Debenhams like- for-like sales were encouraging at 7.4 per cent but Burton sales were only slightly ahead.

Two new Debenhams stores have been added in Dublin and Lincoln and are performing in line with expectations. A further two outlets will open in the Leeds White Rose Centre and in Barrow in Furness in the spring.

There was more good news on margins with the gross figure up by a full percentage point. Costs are being held in line with earlier indications.

As a group Burton has only recently started to drive sales higher after a period between 1993 and 1995 when they went nowhere. Sales this year should be pounds 400m higher than two years ago.

The shares have had an extremely good run, rising from 51p in 1994 to 155p, though they showed a 6.75p drop yesterday as some investors took profits. Looking forward, Burton's mail order acquisitions look promising, though they are not expected to contribute to profits in the short term. Burton plans to have all its brands on catalogues over the next two years.

Added to this is the positive sentiment in the market, where the City believes in Mr Hoerner and is confident that he can finish the job he started. On full-year profit forecasts of pounds 185m the shares trade on a forward rating of 18. Not cheap but still worth holding.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
Friends is celebrating its 20th anniversary this year
tvSeries celebrates 20th anniversary
News
news
Life and Style
Jack Cooksey goes for the grand unveiling - moments before dropping his new iPhone 6 on the floor
iphone launch
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
Yaya Touré (left) and Bayern Munich’s Spanish defender Juan Bernat
football
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week