The Investment Column: Stoves cooks up a storm as confidence returns
Wednesday 05 February 1997
Mr Crathorne and his team have clearly found life as a public company a little more distracting than they expected. But after a 7p rise to 297.5p yesterday, investors have little to complain about in the shares' near- 45 per cent outperformance against the rest of the market thus far and there is still plenty of life in the Stoves story.
Yesterday's 57 per cent leap in pre-tax profits to pounds 2.37m in the six months to November came on the back of the first signs of revival in consumer confidence for years. Having risen by more than 4 per cent in 1996, Mr Crathorne is forecasting another 5 per cent increase in the British cookers market over the next 12 months. With less than 5 per cent of Stoves' turnover going overseas, the group's heavy reliance on domestic sales should stand it in good stead in the future.
But that is the icing on the cake. The group has already proved its ability to take on international groups such as Electrolux, GEC and Whirlpool and beat them at their own game. It reckons it has raised its market share by around 2 percentage points to 18 per cent over the past 12 months, mostly through growth in freestanding electric cookers, which saw a record number of product introductions. This produced a leaner margin mix, although operating returns on sales still advanced smartly from 5.5 to 6.1 per cent, boosted by the completion last summer of the group's change-over to its own revolutionary brand of production technology.
Mr Crathorne says the rate of new product launches means the group will never be short of ways to squeeze out further efficiencies. Longer term, the launch into Germany later this month with a new range of electric models, to be followed soon by a move into France, will open up two markets which are together worth around four times that of the UK. Continental operations could take another two years to be contributing fully and Stoves may first need to use its minimal gearing to pick up a suitable brand name to tackle the notoriously xenophobic French market.
For this year, Kleinwort Benson, the group's own broker, is going for profits of pounds 5.8m, rising to pounds 7m next, putting the shares on a forward multiple of 19, dropping to 16. Hold on.
- 4 #JeSuisEd: People share photos of themselves eating awkwardly in solidarity with Labour leader
- 5 Women think Irish men are the sexiest, survey finds
Italian police 'reveal' what Jesus looked like as a young boy
Mysterious 'X-Files' sounds heard miles above the Earth
Florida couple forced to register as sex offenders for having sex on public beach
Who should I vote for in the general election? Take The Independent's interactive quiz to find out which party is the right choice for you
General election: Conservatives mocked online over Boris Johnson's claim of SNP 'jockalypse'
In defence of liberal democracy
General Election 2015: Post-election 'shambles' looms as 70 per cent of voters say SNP 'should not be able to veto UK government policies'
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
General Election 2015: Sturgeon claims Scots 'appalled' by Ed Miliband's refusal to work with SNP
iJobs Money & Business
£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...
£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...