The Investment Column: Watson & Philip corners a market
Thursday 22 January 1998
W&P is picking up business from traditional corner shops and newsagents that are struggling to cope with the might of the supermarket giants and closing at an alarming rate. Of course, W&P faces the same competitive threat. But it has not tried to beat the likes of Tesco or Sainsbury at their own game. Instead, the group just offers those sort of products that you forgot to buy on the weekend shop. And by offering just one recognised brand, rather than an vast array of own-label goods, it has room for other attractions such as videos or Dunkin' Donuts.
A profits warning in 1996 suggested that W&P's ambitious expansion plan was in danger of coming off the rails. However, the new chief executive, Colin Glass, seems to have sorted out the wrinkles and the group has not looked back since. Now W&P plans to open another 200 stores a year.
Profits grew more than a fifth to pounds 21.1m for the year to November, causing the shares to rise another 11.5p to 529.5p. With plenty of new sites available, its franchise operation taking off and margins rising due to greater purchasing power and distribution economies, W&P's future looks promising.
The supermarkets are beginning to cotton on to the convenience market by opening smaller stores on the high street. However, these are still based around food and W&P is proving adept at fighting off their advances.
Dresdner Kleinwort Benson forecasts current profits of pounds 25.4m rising to pounds 30.8m the year after, putting the shares on a prospective p/e ratio of 13, then 11. Good value.
- 1 Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
- 2 Tom Cruise: Reporters banned from asking actor about Scientology
- 3 A-level results 2015: UK exam board OCR admits it 'estimates' hundreds of pupils' grades after papers 'go missing'
- 4 Dutch King Willem-Alexander declares the end of the welfare state
- 5 Giant Minion terrorises drivers in Ireland as 40ft inflatable blocks traffic on Dublin road
Edward Heath 'raped 12 year-old boy at Mayfair flat'
Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
'Gene drive': Scientists sound alarm over supercharged GM organisms which could spread in the wild and cause environmental disasters
Labour leadership race: Jeremy Corbyn could be the next Prime Minister, says Ken Clarke
Tom Cruise: Reporters banned from asking actor about Scientology
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Chris Leslie: Jeremy Corbyn's anti-austerity agenda will harm the poor, says Labour shadow Chancellor
Landlords renting properties to illegal immigrants to face up to five years in prison
While we fixate on Calais, the Home Office is quietly deporting dozens of migrants on 'ghost flights'
Calais crisis: The seven claims made about the migrants - and the reality
iJobs Money & Business
£35 - £50k DOE: Guru Careers: A Tax Manager / Accountant (ACA / CA / CTA) is n...
£35000 - £37000 per annum + benefits: Ashdown Group: Contracts Executive - Cit...
£20000 - £25000 per annum + OTE £45K: SThree: SThree Group have been well esta...
£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...