The Investment Column: Filofax can still organise growth

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The Independent Online
The problem for Filofax's management in the last couple of years has been convincing the City that there is enough growth left in its major markets to maintain past performance. The UK, critics said, was relatively mature and continental Europe, where usage of personal organisers is lower, had not really taken off.

It was largely these fears, together concerns over the effects of the Paris strike at the end of last year, which had been acting as a brake on the shares. There was also an element of profit taking on a stock that shot from just 21p at the end of 1991 to a high of 275p last year.

These concerns were not dispelled when Filofax bought its rival, Topps of England, last year, giving it 85 per cent of the UK market. With no rivals to speak of, Filofax would have to expand its home market rather than take share from others.

Yesterday's results supported chief executive Robin Field's view that there was still more to go at. The shares jumped 19p to 242p on the back of a 33 per cent increase in pre-tax profits to pounds 6.6m for the year to March.

The UK market is growing by 10 per cent a year and Filofax hopes to boost sales further by launching some top-end organisers priced at pounds 100-pounds 150. Margins have improved and Topps contributed profits of pounds 0.8m on sales of pounds 5.4m.

The company is keeping separate sales forces for the two brands to emphasise the difference. Filofax is pitched at the posh, aspirational end while Topps' Microfile is targeted at the mass market.

While the UK's market chugs along, continental Europe is going like a train. European sales increased by 36 per cent to pounds 15m last year.

UBS is forecasting profits of pounds 8.2m this year, which puts the shares on a forward rating of 13. Worth a look.