Reject Shop outlook gloomy

ANOTHER gloomy year for The Reject Shop has seen pre-tax profits nearly halved, a drop in like-for-like sales and a chunk taken out of the total dividend, which is slashed from 3.15p to 1.5p, writes Topaz Amoore.

Shares in the USM-quoted company fell 6p to 49p after it said there was very little evidence of improved trading since the year end. Pre-tax profits for the year to 21 March were pounds 345,000 against pounds 652,000 last time.

Anthony Hawser, joint chairman, said The Reject Shop's major market, which consisted of 18- to 35-year-old customers in the B, C1 and C2 social groupings and based in the South- east, had been more adversely affected by the recession than others.

He also said that the company had recovered from previous recessions more slowly than other sectors.

The company opened five new stores last year, with a further two opening since the year-end. It has seen some growth in London and substantial sales increases in furniture.

More customers are taking up credit facilities, but this helped to inflate gearing from 16 to 34 per cent. Interest payable rose from pounds 343,061 to pounds 393,555. Earnings per share fell from 4.47p to 2.52p and there was a final dividend of 1p.