Good morning!

Today's the day when Scots vote on independence. It will certainly be good to get this uncertainty out of the way. It's scary that the polls are still so close, given the catastrophic consequences of a Yes vote. Two Scottish-based companies in my portfolio have said this week that they consider a Yes vote would be highly damaging, and that they would seriously look at relocating their business to England.

I suspect that the silent majority will prevail. Let's hope so anyway.

Results are coming thick & fast from companies in my portfolio this week, so here we go:

French Connection (LON:FCCN)

Share price: 62.6p
No. shares: 95.9m
Market Cap: £60.0m

Shares in this fashion retailer/wholesaler are a potential turnaround situation. The company has seen erratic performance in recent years, swinging from losses into profits, then back into losses. There are a number of issues, but to my mind the key issue is down to product (it always is with retailers - if you have the right stock, it sells itself).

FCCN operates at the upper end of the High Street market, so it's high fashion, at relatively high prices. So if they don't get the fashion right, customers won't buy. Note how the turnaround in profitability can be dramatic when they do get the product right - swinging from a £ 10m loss to a £ 10m profit in 2010/11 for example;


I've done very well on this share in the past - catching the big waves up, and selling at (roughly) the right time once it became fully valued.

Interim results for the six months ended 31 Jul 2014 are out this morning. These show a reduced loss compared with H1 last year, down from £6.1m loss to £3.9m loss. The company confirms that it is trading in line with market expectations, so it's a bit odd that the share price dropped sharply first thing this morning.

One point to note is that FCCN shares often drop when interim results come out, because some punters don't realise that the company has a strong H2 weighting to its trading (the buoyant Xmas period). I crunched some numbers a while back, and H2 was usually about £6m more profitable than H1, although that gap narrowed last year.

So a loss of £3.9m in H1 suggests that H2 might deliver a profit of £6m better…

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