N Brown Group
A nasty set of interims that caught the market with its big pants down. The group is well known for catalogue based selling to the old and the large and the old who are large, with an element of credit through instalment payments. Under the guidance of new CEO, Angela Spindler, the group has been moving towards more on-line selling, de-emphasising catalogues, opening High Street sites and raising their fashion content. You may even have seen Lorraine Kelly looking happy to be amongst JD Williams clothed customers, or previously Freddie Flintoff wearing Jacomo. Unfortunately for N Brown they seem to have launched their autumn winter slightly later than previously, with a delayed mailing and managed to coincide this with the unfavourably mild weather of late.
The shares have fallen heavily, not helped by soggy markets, to 290p. For the year to February 2015, eps could be 25p, with a well covered dividend of 14.4p. These equate to a modest PE of 11.6x and a yield of almost 5.0%. If this is the bottom of their fortunes then these may seem attractive metrics, however the concern is that trading may stay tough and that the CEO has changed too much too quickly. It looks as if there is no great rush to commit money to these shares unless their fortunes and or those of the market start to improve. (Neil Cumming, 13th October 2014)
These comments are not a personal recommendation to deal. Any investments can fall as well as rise in value so you could get back less than you invest. I may have a financial interest in some of the stocks written about.
www.dividendpower.co.uk info@dividendpower.co.uk
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