Updates

N Brown - Small eps downgrade triggers over-reaction

June 2016

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

The fall in N Brown’s shares after full year results to end February looks overdone as the downgrade to forecasts was only 6%. Results themselves showed revenues up 3.5% to £866m while adjusted pretax profit and eps both fell 2% to 384.5m and 24p, respectively. Product revenue rose 4% to £606m and financial services increased 2% to £259.6m – OK given respective headwinds from the mild winter and tightening of credit criteria, the latter reducing bad debt provisions from 18.3% to 16.1%. Net debt rose from £250m to almost £290m but is more than covered by its debtor book of £527m.Importantly, strategic progress continues to be made. The proportion of sales generated online rose by 6% to ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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