The Investment column: Signet rings up a big rise in profits
Wednesday 08 April 1998
It posted its first interim profit in seven years in September. And yesterday it added to the feel-good factor with a 52 per cent rise in full-year profits to pounds 68.7m. Debts are down from pounds 240m to pounds 158m and same-store sales rose by a very creditable 7 per cent.
It is small wonder that Jim McAdam, Signet's chief executive, was looking decidedly chipper yesterday. All his hard work has finally been reflected in the share price, which was looking completely bombed out in mid-1995. From less than 30p at the beginning of the year, Signet shares have risen sharply to 42.75p, up 2.5p yesterday
Signet is obviously improving but what is clear is that it is Signet's US operations that are now the driving force behind the group's performance. Like-for-like sales there were up 9 per cent last year compared to 3.5 per cent in the UK. US sales account for 60 per cent of the group total and the American market looks more buoyant.
In the US, Signet's Kays stores have been performing ahead of major rivals such as Zales and Marks Bros with no reduction in margin. The Jared format of out-of-town jewellery superstores also looks interesting.
Signet now has seven of the stores, which are five times the size of a normal mall outlet. It will add another 10 over the next year or two and management suggests that there might be room for up to 100 across the country.
In the UK the more upmarket Ernest Jones is doing well while the more mass-market H Samuel is finding the going tougher with like-for-like sales up by around 1 per cent. A demerger of the US operations would be no surprise but management says there are no current plans.
Assuming profits of pounds 78m this year the shares trade on a forward price/earnings ratio of 13. A heavy discount to the sector and there could still be some upside even after the shares' good run.
- 1 Student jailed for hacking University of Birmingham computers to improve his grades
- 2 Smartphones are making children borderline autistic, says psychiatrist
- 3 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 4 Teaching profession headed for crisis as numbers continue to drop and working lives become 'unbearable'
- 5 The most powerful passports in the world
Student jailed for hacking University of Birmingham computers to improve his grades
Smartphones are making children borderline autistic, says psychiatrist
Nepal earthquake: More than 1,100 killed across four countries and in Mount Everest avalanche
Royal baby: Live updates as the wait continues for Duchess of Cambridge's second child
Hermann Goering's daughter fails to reclaim items looted by Nazi deputy during WWII
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove
Rupert Murdoch berated Sun journalists for not doing enough to attack Ed Miliband and stop him winning the general election
iJobs Money & Business
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...
£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...