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Laura Ashley is held back by Brexit currency effects

Analysts fear the fashion and home chain isn't sufficiently hedged against current global exchange rates
August 18, 2016

Full-year numbers from high street chain Laura Ashley (ALY) require a fair bit of decoding. For a start, the company has moved its financial year end to 30 June, which means most of these reported numbers account for a 74-week period. Like-for-like retail sales grew 4.1 per cent over that time, compared with a 4.8 per cent growth rate reported alongside the group's last set of accounts for the year to end-January 2016. On a pro-forma basis chief financial officer Seán Anglim reckons underlying sales would have been somewhere between these two figures.

IC TIP: Hold at 22p

However, analysts appear more concerned with the company's hedging arrangements in light of the recent weakening of sterling against the US dollar. Mr Anglim confirms that the group pays for some of its products - mainly fashion lines and home accessories - using the greenback, although the majority of high-ticket items, like wooden furniture, are sourced directly in the UK or eastern Europe. Regardless, Cantor Fitzgerald says the group isn’t "significantly hedged", and has lowered forecasts for the year ending June 2017. The brokerage now expects pre-tax profits of £17m (reported period: £25.8m), giving EPS of 1.85p.

LAURA ASHLEY (ALY)
ORD PRICE:22pMARKET VALUE:£160m
TOUCH:21-22p12-MONTH HIGH:29pLOW: 21p
DIVIDEND YIELD:11.4%PE RATIO:9
NET ASSET VALUE:6.4pNET DEBT:38%

Year to 31 JanTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201228618.41.82.0
201329920.12.02.0
201429519.32.23.5
201530423.52.51.0
2016*40123.92.32.5
% change+32+2-7+150

Ex-div: tbc

Payment: tbc

*74-week period ended 30 June 2016, so encompasses one interim dividend of 1p and two 'finals' of 1p and 0.5p