Yes. The only reason I see anyone might possibly hold this is the dividend. The cash flow is so poor this looks on the cusp of being cut. With hindsight the previous special dividend payment looks misjudged. The shrink fit does not look to have produced any benefits & cutting never equals growth. Avoid
Share price retraction (after the large dividend payment) is overdone, IMO.
Excellent value here (sub 175p) , more good dividends to come, therefore
share price likely to move north again soon.
I know retail,especially bricks & mortar retail, is generally not a good call at the moment,due to lower exchange rate & hefty competition for the customers pound,migration to on-line;although selling shoes on-line can mean lots of returns, but I think this is company has merits.
Very high gross margin & decent net margins but affordable product offer,good balance sheet with the proviso that the pension scheme is a bit of a worry but the deficit should have peaked and will fall if rates increase;generates plenty of cash for dividends.
I like their policy of taking short leases;in a market where retail property supply is increasing and rents falling generally it makes sense & should not be tied into over priced rents,rates review seems favourable probably because it trades from secondary locations.I think turnover growth will at best be modest in the medium term but so will capital investment.....
The most recent interims said 'product gross margins remain robust at 61.1%'. Does anyone know how they arrive at this figure? Gross profit was £9.9m on revenue of £74.6m, equating to a gross margin of 13.2%.
Operating margin looks to have gone down substantially too: by my calculations from 9.3% in H1 15 to 2.6% in H1 16.
finnCap's published a note this morning, it's up on research tree
"H116 numbers were a tale of two quarters. H2 is trading in line with expectations and has a soft base. We ... price target but move from a ... rating given the share price appreciation. Interim numbers were marginally lower YoY. Revenue was down 4.6% to £74.6m and gross profit was down 5% to £9.9m (margin flat) with pre-tax profit and EPS both down 4% at £1.9m and 3.0p respectively."
Oddjock - Thanks for that info, I should have checked on that. Never mind, I'll be receiving
that juicy dividend on my existing holding, and next year on my enlarged holding. Not many
stocks yield such a good dividend.
I won't bore anyone with the details unless they're interested, but if Shoe Zone's standard of customer service is in any way reflected in its financial performance, then this is a share I would steer well clear of.
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