Laura Ashley (29p and 2% of the JIC portfolio); This could be really silly but I have just bought a 2% holding in Laura Ashley. It has been a bit of a basket case for years ; I remember being sucked into it in the mid-90's when new management were supposed to be weaving there magic but it turned out to be an illusion! Although the shares recovered from around 60p in 1994 to 200p in 1996 it then collapsed to a low of 6p in May 2003 and has bounced around between 10p and 30p ever since.
I think however, that things have changed. It seems to have improved its multi channel offering with a much better web site, the recent introduction of a mobile (Smartphone) site and click and collect. it has also focussed on improving its overseas offering with 263 franchised stores principally in the Far East (Japan) and Continental Europe. The Company is set on increasing its business in other rapidly growing markets such as China, India and South America through franchise partners.
Recent results have been encouraging. The trading statement issued on 14th December showed like for like sales up 4.9% in the 19 weeks of the second half to 8th December. E-Commerce recorded an increase of 22.6% helped by the introduction of the mobile site and now represents nearly 20% of UK sales. Increased overseas deliveries also contributed to growth. Laura Ashley has achieved this improvement during a difficult time on the high street; just imagine if they had a following wind!
Conclusion: The balance sheet is strong with £27.8m of cash at the interim stage. Enterprise value of around £185m is only about 60% of sales. Earnings are forecast to come in at 2.0p per share for the year ended 31st January 2013, (results to be announced on 28th March). Forecasts for 2013 are 2.2p and 2.4p for 2014. So, at 29p the shares are valued at 14.5x 2012, 13.2x 2013 and 12.1X 2014 for about 10% growth per annum. The other attraction is a dividend of 2p in each of these year giving a yield of 6.9%.
