The Investment Column: Signet

THE QUIET recovery continues at Signet, the H Samuel and Ernest Jones jewellery retailer. The shares have risen from 12p in 1995 to 56p yesterday, valuing the business at almost pounds 1bn. Debts have been all but eradicated. The company is even talking about acquisitions.

But Signet is still a tale of two halves. The US operations, which trade principally under the Kays name, have powered ahead and account for almost 70 per cent of sales. But the UK remains sluggish; its sales have barely grown in five years.

The overall picture is positive, however - even if management has effectively ruled out spinning off the US interests. Half-year profits almost doubled to pounds 10.8m; like-for-like sales climbed 7 per cent. The US is leading the charge with underlying sales up 11 per cent. The challenge is to boost the UK, where underlying sales fell 1.2 per year-on-year. Signet is making store managers more accountable and upping marketing spend.

On full-year profit forecasts of pounds 107m the shares' measly rating of 12 looks unjustified. Buy.