Airsprung Furniture Group (LON:APG) (APG, 20.50p, £4.90m), The disappointing AGM statement confirms post the General Election, UK household finances continues to suffer a backdrop of squeezed disposable income, stubbornly high inflation and the proposed fiscal austerity which will include increases in taxes, a reduction in various benefits and allowances and an increase in unemployment in the public sector. Airsprung have felt the adverse effect in the last quarter. We expected the business to benefit from individuals trading down to budget mattresses such as, Airsprung Beds - this has not been the case. Sales in the budget beds are slightly softer than the previous year. On a positive note, improved terms to the licensing agreement in the USA will generate higher profits. Additionally a new UK licensing agreement for the use of the Airsprung brand on pillows, duvets and other bedding products, will develop new revenue and earning streams. The group continue to tighten costs. For H1 2011 the group expect to deliver “reasonable levels of profits, but a little short of last year”.  The market forecast 2011 sales of £40m, PBT of £0.8m and EPS of 2.3p.  Trading on a prospective PER of 8.9x, we believe the stock is fairly valued given the uncertain outlook. However, the valuation fails to take into consideration the strong balance sheet. The group is trading at a 49% discount to its tangible net asset of £9.6m. We do not expect the share price to increase significantly until the market conditions improve. The strong assets encourage us to reiterate our BUY recommendation.  

Cleardebt Group (LON:CLEA) (CLEA, 1.60p, £4.93m), the IVA business reports a year of growth for the period ended 30 June 2010. Following the acquisition, the total number of IVAs and PTDs generating income increased to 4,894 (2009: 858) and debt management plans rose to 6,316 (2009: 3,430). Revenues almost doubled to £6.6m (2009: £3.4m) and normalised PBT increased by 1.2x to £1.2m (2009: £0.54m).  However an increase in amortisation to £0.99m (2009: £0.08m), an exceptional gain on a bargain purchase and higher interest costs reduces PBT to £0.47m (2009: £0.46m). The IVA market has continued to grow increasing market share. The Board believe the weak housing market and fiscal austerity including increase in taxes, reducing benefits and public spending cuts will continue…

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