Flat sales at personal goods group Swallowfield (SWL) masked 25 per cent growth within its owned brands segment, which now comprises 31 per cent of the overall top line. This rise was offset by a 6 per cent decline in the group’s larger segment, manufacturing, albeit against strong prior year comparatives. Despite falling sales in manufacturing, management cite significant new contract wins, so expectations are for the segment “to quickly return to growth”. Launch volumes among manufacturing customers were exceptionally high during the second half of 2016 and first half of 2017, and management had predicted a normalisation here.
Swallowfield acquired The Brand Architekts portfolio in June 2016, and its performance “continues to be very positive” since being integrated into the owned brands business. Indeed, growth across all key brands during the Christmas period helped drive up the group’s overall gross margin from 18.7 to 19.9 per cent. To coincide with these results, Swallowfield announced another addition to its owned brands division: it has acquired Fish, a men’s grooming brand, for up to £3m.
Analysts at N+1 Singer forecast adjusted pre-tax profits of £5.2m and EPS of 24p for the 12 months ending June 2018, up from £3.6m and 17.3p a year earlier.
| SWALLOWFIELD (SWL) | ||||
| ORD PRICE: | 343p | MARKET VALUE: | £ 57.9m | |
| TOUCH: | 335-350p | 12-MONTH HIGH: | 420p | LOW: 268p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 144p* | NET DEBT: | 29% | |
| Half-year to 6 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 39.7 | 2.0 | 9.7 | 1.7 |
| 2018 | 40.0 | 2.8 | 13.1 | 2.0 |
| % change | +1 | +38 | +35 | +18 |
| Ex-div: | 03 Mar | |||
| Payment: | 26 May | |||
| *Includes intangible assets of £9m or 53.5p per share | ||||
