Good morning! I'm running late this morning, apologies for any inconvenience.

 

 

Pittards (LON:PTD)

Pittards is a leather goods manufacturer, based in the UK and Ethiopia. They had a turbulent year in 2012, with various issues affecting performance, but have been recovering in 2013. The market cap at 200p per share is £18.1m. They are not the easiest shares to buy or sell, as liquidity is a problem, and the bid/offer spread can sometimes be too high. It's 195p/205p at the moment, although a good broker should get you 3p or 4p inside that spread.

Checking the archive here, I reported on Pittards interim results on 27 Aug 2013 here, noting that the shares looked good value on a PER of about 6, based on a share price of 2.25p. There has since been a 1 for 50 share consolidation, so that translates into 112.5p in new money. The actual share price is now 200p, so that's been an excellent 78% profit for people who spotted the value and the turnaround last summer.

Results for calendar 2013 are out this morning, and show EPS if 15.7p, which is bang on broker consensus forecast, and shows a fairly consistent level of profitability from the interims, of about £1m per half year, so £2m full year pre-tax profit. That puts them on a PER of 12.7 which looks about right to me.

The outlook statement today notes a concern over dollar weakness, but sounds otherwise moderately upbeat;

 

The global trading situation looks brighter than it has since the recession and should provide many opportunities to grow the business and continue with our core strategy in the future.  The current relative weakness of the dollar is a concern but we will seek to mitigate its effect wherever possible.

 

The joker in the pack here, and what interests me in these shares, is that the Chairman of Mulberry, Godfrey Davis, recently joined Pittards as a Non-Exec. Mulberry of course has been highly successful in the luxury leathergoods area, such as high-end handbags. So if Pittards is able to develop its business and brands into anything like the success that Mulberry achieved, then it could potentially get exciting. At this stage though that's just potential upside, we'll have to see how things pan out.

I…

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