Good morning!


Laura Ashley Holdings (LON:ALY)

Share price: 22.1p (up 4.1% today)
No. shares: 727.8m
Market cap: £160.8m

(at the time of writing, I hold a long position in this share)

Results for 74 weeks to 30 Jun 2016 - one of the headlines in my newsfeed this morning was "profits up at Laura Ashley", which surprised me. However, on closer inspection there's a catch - the period being reported on today is an extended one - 74 weeks to 30 Jun 2016, or 17 months. The change in year end was announced here on 14 Sep 2016.

I very much dislike year end changes, as it completely throws out comparisons of performance for several years. Although often companies use pro forma figures for comparison purposes, which is helpful. Unfortunately ALY has not done that today - so the 74 week period is compared with the previous accounting period of 53 weeks, which of course is a totally meaningless comparison.

There were however, a set of accounts reported for the 52 weeks to 30 Jan 2016, which I reported on here. This showed a solid performance in the UK, but disappointing international performance (mainly due to Japan being weak).

We can of course deduce the more recent performance, by taking the most recent 74 week figures, and deducting the 52 weeks to 30 Jan 2016. The result of that is a profit of £5.1m for the 22 weeks to 30 Jun 2016.

The nearest comparison is the 26 weeks to 1 Aug 2015, which showed a pretax (and pre-exceptional) profit of £8.4m. However, that's not a valid comparison, since the missing 4 weeks are in July, which will be a highly profitable month.

So my conclusion is that it looks as if performance is currently running in roughly the same ballpark as last year.

LFL sales - a key measure of performance for retailers, since like-for-like figures strip out any impact from new store openings & store closures. Therefore it's a good measure of underlying performance. However, there is no standard method of calculation, so some retailers are naughty and include refitted shops in LFL figures, which of course is wrong! A refitted store is quite clearly not a like-for-like comparison.

ALY reports decent LFL sales growth at +4.1% for the 74 weeks. That's impressive, at a time when many retailers are struggling to report…

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