Beale (LON:BAE) (BAE, 36.25p, £7.4m), the operator of department stores, reports in a trading update for the 45 weeks to 11 September 2010. Like-for-like revenues were slightly disappointing, down 1.7% on the previous year due to reduced big ticket sales. However acquisitions of department stores increased total revenues was up 0.8% on the prior year. The gross margins including concessions are marginally below the previous year due to product mix of the Hexham which includes the food hall. The overheads have been reduced. The recent acquisitions will have a limited impact on the current financial year, but will enhance earnings in 2011. The £9.0m term loan with an operating overdraft of £0.11m, which has been renewed with HSBC Hldgs (LON:HSBA) for a two year period. The banking facility will enable the group to make further acquisitions to broaden their portfolio. We believe the coalition government’s aggressive fiscal programme and the austerity measures such as the VAT hike to 20% in January 2011 will provide little growth in total consumer spending for the foreseeable future. With consumer confidence in the UK expected to weaken, we believe there is a high risk like-for-like sales in the current and coming financial year will soften. The market forecasts 2010 pre-tax losses of £0.1m and EPS of -0.3p. We remind investors the group has a strong balance sheet with tangible net assets of £13.8m exceeding the current market capitalisation. This is an asset play. We reiterate our BUY recommendation.  

Dods Group (LON:DODS) (DODS, 9.875p, £15.03m) Interims to June 2010 saw revenues of £7.9m (£11.3m) though revenues from retained businesses was £6.3m (£7.2m) with retained businesses falling into an EBITDA loss of £0.2m (profit £0.1m) while overall EBITDA fell to a £0.2m loss (profit £0.1m). The group still believes the year will be second half weighted with the election disrupting the first half, despite cuts in public spending that is impacting training activities but increasing the potential for outsourcing. The group remains in potential offer talks and we maintain, despite the losses, a SPECULATIVE BUY recommendation.

Elektron (LON:EKT) (EKT, 30p, £31.72m) Interims to July 2010 with sales up 45% to £20.6m (£14.2m) with EBITDA up 323% to £3m (£0.7m) with underlying…

Unlock the rest of this article with a 14 day trial

Unlock with Email
Unlock with Google

Already have an account?
Login here