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Walker Greenbank is struggling

The group is still expanding internationally but sales are falling overall
October 11, 2018

It's still a difficult time for interiors specialist Walker Greenbank (WGB). Late last year,  disappointing sales in the UK prompted management to warn investors it would miss FY2018 profit expectations by 10 per cent, and it seems the group is still struggling to find its feet. Bosses hope sales from the international business can offset some of the damage, but half-year results suggested challenges exist outside of the UK, too.

IC TIP: Sell at 74p

International sales accounted for 36 per cent of group sales during the first half, but fell 2.9 per cent in constant currency following a decline in brand sales across Western Europe and other 'rest of the world' regions. But that's not to say all markets are struggling. Indeed, the US – the group’s second-largest segment – saw sales rise 5.8 per cent at constant currency following the opening of a second showroom in Chicago.

The group has found better success with its licensing business, which allows its design archive to be used by other companies. During the period, the group signed new agreements with fashion groups including Uniqlo, Radley and H&M.

Analysts at Investec expect adjusted pre-tax profits of £9.5m in the year to January 2019, giving EPS of 10.7p (from £12.5m and 14.4p in 2018).

WALKER GREENBANK (WGB)  
ORD PRICE:74pMARKET VALUE:£52.2m
TOUCH:72-75p12-MONTH HIGH:228pLOW: 63p
DIVIDEND YIELD:5.9%PE RATIO:5
NET ASSET VALUE:92p*NET DEBT:5%
Half-year to 31 JulTurnover (£m)Pre-tax profit (£x)Earnings per share (p)Dividend per share (p)
201755.54.24.820.69
201854.73.94.350.69
% change-2-8-10 
Ex-div:25 Oct   
Payment:23 Nov   
*Includes intangible assets of £31.4m, or 44p a share