Half-year numbers for Footasylum (FOOT) showed some tentative steps forward, and larger steps back, as the athleisure group struggles to properly define and profit from its "differentiated" offering. Aspirations for its website to generate half of the top line continue apace, thanks to a 29 per cent rise in online sales, while the group remains encouraged that a store upsize programme is both a win for suppliers and “an effective use of capital”.
That investment partly explains the net loss; the remainder is more worrisome. The gross margin came in at 42.9 per cent, 210 basis points down on the financial year to February, while capital expenditure is expected to hit £16m. Delays to store openings, and a 38 per cent hike in staff costs against a 23 per cent increase in headcount, all point to a squeeze on cash generation.
Indeed, a £2m negative working capital position, £0.9m tax charge, capital investments and other costs resulted in a £6.9m net cash outflow in the period – although Liberum expects this rate of cash burn to soften.
On average, analysts expect a loss per share of 2.5p in the 12 months to February 2019, and a loss of 2p in FY2020.
| FOOTASYLUM (FOOT) | ||||
| ORD PRICE: | 31.6p | MARKET VALUE: | £33m | |
| TOUCH: | 31-32p | 12-MONTH HIGH: | 273p | LOW: 28.5p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 38.5p | NET CASH: | £4.5m | |
| Half-year to 25 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 83.2 | 1.7 | 1.6 | nil |
| 2018 | 98.6 | -2.5 | -2.6 | nil |
| % change | +18 | - | - | - |
| Ex-div: | n/a | |||
| Payment: | n/a |
