Last year was a tough one for personal goods and household products group Swallowfield (SWL). Not only was the chief executive ousted at the half-year stage, but these full-year figures missed expectations and steps to turn the business around are taking longer than expected. The final dividend has been axed, too.
The turnaround strategy centres on increasing exports, cutting costs and reducing dependency on a handful of large clients and some progress has been made. Direct exports rose 34 per cent and generated 35 per cent of group revenue, while the top three clients represented 32 per cent of sales, compared with 52 per cent last year. There were also a number of new client wins and, together, these factors helped Swallowfield to break even in the second half. However, this wasn't enough to offset poor trading at the start of the year, resulting in an adjusted operating loss of £0.5m compared with a £1.57m profit last year. Restructuring cost £0.5m in the year, with further one-off costs expected this year as a business review gets under way. The debt pile also rose.
Broker N+1 Singer has downgraded its pre-tax profit forecast for 2014 to £0.5m from £1.25m, giving EPS of 3.3p (from a £0.7m loss and 4.3p loss per share in 2013), rising to 8.6p in 2015.
| SWALLOWFIELD (SWL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 79p | MARKET VALUE: | £8.9m | |
| TOUCH: | 75-82p | 12-MONTH HIGH: | 120p | LOW: 73p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | NA | |
| NET ASSET VALUE: | 110p | NET DEBT: | 46% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 49.1 | 1.34 | 9.70 | 5.90 |
| 2010 | 52.4 | 1.18 | 8.20 | 6.30 |
| 2011 | 57.5 | 1.33 | 9.60 | 6.30 |
| 2012 | 57.9 | 1.56 | 11.2 | 6.30 |
| 2013 | 48.6 | -1.21 | -7.20 | 2.20* |
| % change | -16 | - | - | -65 |
*Half-year dividend only | ||||
