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Walker Greenbank dries up after the flood

The interior furnishings manufacturer's flooded site is back up to full speed, while insurance payouts have protected profits
October 13, 2016

Major flooding at its fabric printing site explains the recent sales dip at interior furnishings specialist Walker Greenbank (WGB), but profits were protected thanks to a £7.9m insurance payout. Chief executive John Sach said a chunk of this went towards replacing machinery that was damaged in the December 2015 washout. The site has been back up at full capacity for roughly a month now, and by the end of October it should have fulfilled its backlog of orders. Mr Sachs said it's likely there will be further insurance payouts on top of the aggregate £11.25m booked so far, as more claims are made for loss of profits.

IC TIP: Buy at 202p

The other major announcement was the post-period £25m acquisition of rival interiors group Clarke & Clarke, which will be part-funded by a £17m share placing. Mr Sach said the target company's two composite brands would broaden Walker Greenbank's international reach and, more importantly, give it access to two major UK retailers; Dunelm (DNLM), which it does no trade with, and Next (NXT), with which it trades very little given its major client is competitor John Lewis.

Analysts at N+1 Singer expect pre-tax profit of £5.9m for the year to January 2017, leading to EPS of 6.4p, compared with £7.5m and 9.3p in FY2016.

 

WALKER GREENBANK (WGB)
ORD PRICE:202pMARKET VALUE:£122m
TOUCH:199-205p12-MONTH HIGH:220pLOW: 157p
DIVIDEND YIELD:1.5%PE RATIO:16
NET ASSET VALUE:64pNET CASH:£2.5m

Half-year to 31 JulyTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201545.82.94.00.44
201641.84.96.60.55
% change-9+71+62+25

Ex-div: 20 Oct

Payment: 18 Nov