Watches of Switzerland (WOSG) only listed its shares in June and is still working through the costs associated with an IPO, which caused a pre-tax loss for the year to October. Strip out those costs and adjusted cash profits rose by almost a quarter to £41m on a 9.6 per cent margin, a 50 basis point improvement on the prior year. Management is optimistic about its prospects in the US, and it’s not hard to see why: sales rose 42.1 per cent in the period, or 7.5 per cent on a like-for-like basis.
In an interview with Reuters late last year, François-Henry Bennahmias, chief executive of watch manufacturer Audemars Piguet, said it would look to cut out third-party multi-brand retailers within three to five years. However, Watches of Switzerland opened a mono-brand store with the brand in Atlanta during the period, and may stand to benefit as it looks to open more. The group is on track to open 11 boutiques in the US with Omega, TAG Heuer and Breitling.
However, this is not to say the multi-brand offering is dead. Indeed, the group accompanied its half-year results with the announcement that it had acquired four new UK showrooms from jeweller Fraser Hart for £31.7m, which will all trade under the Watches of Switzerland fascia.
Barclays is forecasting adjusted EPS of 20.4p in 2020, up from 9.4p this year.
| WATCHES OF SWITZERLAND (WOSG) | ||||
| ORD PRICE: | 325p | MARKET VALUE: | £778m | |
| TOUCH: | 324.8-329.8p | 12-MONTH HIGH: | 340p | LOW: 259p |
| DIVIDEND YIELD: | nil | PE RATIO: | 24 | |
| NET ASSET VALUE: | 78p* | NET DEBT**: | 48% | |
| Half-year to 27 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 365 | 12.4 | 4.10 | nil |
| 2019 | 429 | -9.0 | -3.50 | nil |
| % change | +17 | -173 | -185 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £127m, or 53p a share **Does not include lease liabilities of £281m | ||||
