The Investment column: Burton still needs to build sales
Friday 24 January 1997
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.
- 1 Bill Clinton portrait features Monica Lewinsky reference, artist admits
- 2 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 3 PornHub turns masturbation into energy in bid to save the planet
- 4 Have sex with your iPad thanks to the new sex toy no-one asked for
- 5 Average penis size revealed: Scientists attempt to find what is 'normal' to reassure concerned men
Bill Clinton portrait features Monica Lewinsky reference, artist admits
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Kanye West gives guest lecture at Oxford University: 'If I, Kanye West, can remove my ego, I think there's hope for everyone'
'This is what Islam tells us to do': A rare glimpse inside a Saudi Arabian prison – where Isis terrorists are showered with perks and privileges
New theory could prove how life began and disprove God
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
This is what it's like to be dead, according to a guy who died for a bit
Ukip would cut billions from Scottish budget to fund English tax cuts
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
End of the licence fee: BBC to back radical overhaul of how it is funded
iJobs Money & Business
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...
£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...