The Investment Column: New Look
Friday 26 November 1999
That was underlined by yesterday's announcement of a 9 per cent increase in first-half profits to pounds 27m. Like-for-like sales were up by 4.9 per cent in the first half, and although underlying sales are down 1.9 per cent in current trading, this is better than many rivals.
But none of this is reflected in the share price, which fell another 15.75p to 135.5p yesterday, a substantial discount to the 165p issue price at which New Look came to the market 18 months ago.
What is wrong? One key factor is City sentiment turning against high- street retailers, whoever they are. It may also be a reaction against New Look's slightly erratic trading statements.
Yesterday the group reported lower like-for-like sales in current trading, but higher margins. In the spring margins were down, but like-for-like sales were up.
Even so, New Look appears to be doing the right things. It is keeping its prices low while managing its supply chain to help margins. It is also opening larger stores in order to increase its range. The company also confirmed yesterday that it is looking at buying some of the Mothercare stores from Storehouse, although it will not be bidding for the whole chain.
On SG Securities' full-year profit forecast of pounds 46.5m the shares trade on a paltry forward multiple of nine, backed by a solid yield. It would be crazy to sell now, although a meaningful recovery could be some way off. Hold.
- 1 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 3 Top Gear: Jodie Kidd, Philip Glenister and Guy Martin 'in advanced talks' to join show
- 4 Frankie Boyle on Scottish independence: 'In the Interests of Unity, F**k Off'
- 5 How to gain confidence and maximise your sexual potential
Boston Marathon runner's search for mystery man she kissed ends with letter from his wife
Frankie Boyle on Scottish independence: 'In the Interests of Unity, F**k Off'
Italian police 'reveal' what Jesus looked like as a young boy
Mysterious 'X-Files' sounds heard miles above the Earth
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
In defence of liberal democracy
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
Andy McSmith's Sketch: Feisty audience is the real star of an enlightening show
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...