Tuesday, Jan 08 2013 by

The year-end trading statements are starting to flow now, with about 16 issued this morning. So I will review 4 or 5 that look the most interesting to me, with a small cap and retailing leaning.

Allocate Software (LON:ALL)

Allocate Software (ALL) has an unusual 31 May year-end, so their H1 trading update this morning relates to the 6m to 30 Nov 2012. They say that H1 is in line with expectations, but split between a slow Q1 and a "much stronger" Q2. The outlook statement is pretty upbeat, so might be worth a closer look? Although with 5.5p EPS forecast for 2012/13, a share price of 78p prices it on a PER of 14.2, which doesn't excite me. As a value investor I'm looking for decent growth and a PER well below 10.

Majestic Wine (LON:MJW)

Majestic Wine (MJW) shares have done very well, rising 4-fold in the last 4 years. Their Xmas trading statement is pretty solid - total sales up 5.1%, with like-for-like ("LFL") sales up 1.1% for UK stores.


(Explanation of "Like-for-like" (LFL) sales - this is a method of reporting sales, used particularly by retailers, which shows the underlying performance of the business. So it strips out any newly opened or closed stores, and only reports on the stores which have been open for the full period both this year, and last year. Therefore the total % LFL change in sales gives the most meaningful figure to judge performance on. So in the example above, Majestic Wine achieved +1.1% LFL sales in their shops which were open both last year and this year. However, total sales for the whole business rose 5.1%. This indicates that they have opened new stores equating to 4% additional sales (so 1.1% LFL + 4% new stores = 5.1% total sales growth).

There is no reference to profit vs expectations, but given that Xmas trading was slightly ahead of the year-to-date (they report 0.8% LFL sales growth for the 39  weeks to 31 Dec), then one assumes they are in line with expectations. But this should have been made clearer from the RNS.

Interestingly, Majestic do note that many shoppers left purchases to the last…

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Allocate Software PLC (Allocate) is a United Kingdom-based company engaged in software and services business. The Company operates in the healthcare and defense sectors. The Company is a provider of specialist workforce optimization and assurance software and services as well as provides workforce optimization and compliance software applications. The Company’s client base includes healthcare, defense and maritime offshore oil and gas companies. The Company’s license revenue represents revenue from the sale of non-cancellable software license agreements. The Company’s subscription revenue is derived from the sale of software’s as a service product, allocate cloud and hosting revenues. The Company’s support and service revenue represents revenue from the provision of installation, consulting, training and product support. The Company’s subsidiaries include Time Care AB, Time Care Sverige AB, Allocate Software Inc, Allocate Software PTY Limited and Allocate Software Sendrian Berhad. more »

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Majestic Wine PLC is a United Kingdom-based holding company, which is engaged in retailing of wines, beers and spirits. The Company's segments include Majestic Wine Warehouses, Lay & Wheeler and Majestic Wine Calais. Majestic Wine Warehouses is a wine specialist in the United Kingdom selling wine by the mixed case. Lay & Wheeler is a fine wine merchant engaged in en primeur sales, cellarage and broking of customer reserves. Majestic Wine Calais is a retailer-based in Calais selling to the United Kingdom consumers on lower rate of alcohol duty in France. It offers around 82 types of wines to commercial customers. The Company operates around 212 stores in the United Kingdom. The Company's subsidiaries include Majestic Wine Warehouses Limited, Les Celliers de Calais S.A.S., Majestic Wine Employee Share Ownership Trust Limited, Vinotheque Holdings Limited, WBI Holdco Limited and Lay & Wheeler Limited. more »

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Domino's Pizza Group plc is a United Kingdom-based pizza delivery company. The Company holds the franchise to own, operate and franchise Domino's Pizza stores in the United Kingdom, Republic of Ireland, Switzerland, Liechtenstein and Luxembourg. The Company's segments are the United Kingdom, Ireland and Switzerland. It operates approximately 930 stores across its markets. It has approximately 870 stores in the United Kingdom, approximately 50 stores in the Republic of Ireland and over 10 stores in Switzerland. The Company has approximately 90 franchisees. Its main facility is located at West Ashland, Milton Keynes, and has a secondary plant in the North-west in Penrith. It also has a satellite base in Livingston, Scotland. It allows customers in the United Kingdom to order online at its Website,, and in the Republic of Ireland to order online at its Website, It also allows customers to order from its iPhone, iPad and Android applications. more »

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  Is Allocate Software fundamentally strong or weak? Find out More »

1 Comment on this Article show/hide all

marben100 8th Jan '13 1 of 1

I'd like to add one more smallcap update to your list today, Paul: Redstone (LON:RED) , who announced a useful contract win this morning: 


I "inherited" some Redstone shares when Maxima Holdings (LON:MXM) was taken over a few months ago. This contract win demonstrates the synergies between the two businesses. Both companies shares have been well and truly hammered over the last few years. But ISTM that there is "recovery play" potential here (I''ve already seen some recovery in the value of my former Maxima stake, since the takeover). The new combined business seems well focussed in the area of managed network services, which offers growing opportunities and Redstone can offer some economies of scale that may offer a barrier to smaller competitors.

After several years of losses, a return to profitability is expected in the current FY to March 31st. The net profit f/c of £3.5m for FY12/13 translates to an EPS of 0.080p, putting the shares on a CY P/E of 14. Corresponding figures for FY13/14 are £4.2m, 0.096p and 12.

I intend to continue holding, for the time being, and see how this business progresses.



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About Paul Scott

Paul Scott

Paul trained as an accountant, then spent 8 years as FD for a ladieswear retail chain.He became a professional small caps investor in 2002 to date.Paul writes a small caps report for on weekday mornings. He joined Fundamental Asset Management Ltd as a research associate in 2014, as part of their Small Cap Value Portfolio team. more »


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