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Secondary Recommendation

N Brown

November 2013

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.

  • Epic Code:
  • BWNG
  • Price:
  • 502p
The negative reaction to the results was one occasion where the market has got it badly wrong. The company produced a respectable 8% rise in turnover to £410m while pretax profit increased 7% to £45m. A rise in the tax rate from 17.3% to 22% explains why eps might have looked flat at 12.6p. Like-for-like sales grew 8%, as its catalogues continued to attract new customers, while all its specialist brands and homewares and lifestyle categories enjoyed growth. However, the reason the shares fell out of bed was an increase in bad debts, which reduced gross margins 80 basis points to 52.5% but it's important to remember that a large proportion of N Brown's profit comes from advancing credit and therefore every time it acquires new cu ...

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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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