Shoe Zone’s (SHOE) full-year numbers don’t look overly inspiring at first glance. But a 7 per cent squeeze in pre-tax profit was in fact the result of a poor first-half performance, which started to correct towards the end of the financial year. The group’s chief financial officer, Jonathan Fearn, said profitability took roughly a £1.7m hit during the first six months, which narrowed to just £600,000 in the second. The slight dip in the top line continues to reflect ongoing closures of underperforming stores, but these are becoming less prevalent: only 6 per cent of the current store estate is loss-making (compared with 11 per cent three years ago) and the group expects to take this to 5 per cent within the next 18 months.
Mr Fearn said the group should also move into a more benign cost environment in the year to September 2018. Adverse foreign exchange rates (the result of the sterling slump against global currencies) should start to annualise out, while rental costs will continue to fall.
Analysts at Numis expect pre-tax profit of £10m for the 2018 financial year, giving EPS of 16.5p, compared with £9.5m and 15.8p in FY2017.
| SHOE ZONE (SHOE) | ||||
| ORD PRICE: | 161p | MARKET VALUE: | £80.5m | |
| TOUCH: | 160-162p | 12-MONTH HIGH: | 198p | LOW: 148p |
| DIVIDEND YIELD: | 6.3% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 62p | NET CASH: | £11.8m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013** | 194 | 5.1 | 6.9 | na |
| 2014 | 173 | 10.5 | 16.1 | 3.6 |
| 2015 | 167 | 10.1 | 16.2 | 9.7 |
| 2016 | 160 | 10.3 | 16.9 | 10.1 |
| 2017 | 158 | 9.5 | 15.8 | 10.2 |
| % change | -1 | -7 | -7 | +1 |
| Ex-div: | 22 Feb | |||
| Payment: | 14 Mar | |||
| **Pre-IPO figures | ||||
