Are things finally turning around for fashion chain
Like-for-like retail sales across the UK and Europe rose 4.4 per cent over the reported period, although the closure of nine stores in that time (including two in North America) dragged total retail revenue down 4.9 per cent. Wholesale revenue crashed by more than 9 per cent due to a poor sell-through performance in the first half, but trends here are improving thanks to the changed timing of certain deliveries to clients and better trading in the second half. Licence income also fell by £1m to £6.3m following the transition of the group's perfume licence to global group Interparfums, and the declared bankruptcy of a shoe licensee in the US.
Analysts at Numis expect the company to move back into profitability in FY2019, expecting initial pre-tax profit of £0.8m, giving EPS of 0.9p (from losses of £3.7m and 3.8p in FY2017).
|FRENCH CONNECTION (FCCN)|
|ORD PRICE:||37p||MARKET VALUE:||£36m|
|TOUCH:||34-37p||12-MONTH HIGH:||52p||LOW: 30p|
|DIVIDEND YIELD:||nil||PE RATIO:||na|
|NET ASSET VALUE:||51p||NET CASH:||£13.5m|
|Year to 31 Jan||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
Trading into the new financial year has continued to improve, prompting a positive reaction from the company's investors. But the lack of earnings makes valuing the shares difficult, so we'd want to see tangible evidence of progress before turning bullish here. Move to hold.
Last IC View: Sell, 41p, 20 Sep 2016
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