The polishing has continued in earnest at Shoe Zone (SHOE) as management continues to whip its estate, factory operations and merchandise into shape. Chief executive Anthony Smith said there would be roughly 15 more closures of loss-making stores on top of the 23 in the reported period. These closures will be mostly counteracted by new openings, with three new 'big box' stores set to open in August.
The existing estate has also been improved, with 53 'Grade 1' stores - those over 1,500 sq ft - created in the period. Mr Smith said downward pressures on rents meant the retail chain had in some cases been able to move to a larger property in the same town for the same or similar rents. A total of £222,000 has been saved this period thanks to rent renewal agreements.
Despite its name, the company has also been concentrating on items such as handbags, socks and other accessories, sales of which grew by a third in the period. In the first half, Shoe Zone invested significantly in its Leicester distribution centre, including a new online order fulfilment area intended to future-proof the business as the online ordering trend grows.
Analysts at Numis expect pre-tax profit of £11m for the year to September 2016, leading to EPS of 17.6p, compared with £10.1m and 16.2p in FY2015.
| SHOE ZONE (SHOE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 200p | MARKET VALUE: | £100m | |
| TOUCH: | 195-205p | 12-MONTH HIGH: | 219p | LOW: 155p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 61p | NET CASH: | £8.1m | |
| Half-year to 2 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 78.2 | 2.0 | 3.2 | 3.20 |
| 2016 | 74.6 | 2.9 | 3.1 | 3.30 |
| % change | -5 | -5 | -4 | +3 |
Ex-div: 21 Jul Payment: 17 Aug | ||||
