French Connection is an interesting company. Once a darling of the high street, it has lost it's sparkle in recent years and, as a consequence, investors have suffered a torrid time. However, the stock is certainly a potential turnaround and recovery situation.
Investors will no doubt be heartened by this mornings trading statement which is encouraging. Sales of their Winter collection have been strong and all other areas of the business are also trading in line with expectations. Importantly, as they continue to close non-profitable stores they will also vacate their Regent Street, London store at the end of March 2016, at which time they will receive a compensation payment of £2.4million, while also removing the on-going trading losses of the store.
Certainly all of this sounds encouraging and they sound pretty confident of meeting market expectations, despite still having the all important Christmas period to come.
The attraction of French Connection as a recovery play has always been the strength of it's balance sheet and whether or not it can achieve a turnaround in it's fortunes before significantly depleting it's cash pile.
In the half-yearly report net tangible assets were around £47.5m with no debt against a market cap., after this mornings sharp rise in the share price, of around £36m.
I'm not a holder or potential investor, but it does look interesting, although what the FCUK do I know?
By the way, I do hope that they have dropped the FCUK branding since it will stop me posting puerile jokes?
Actually, I'd guess they did this some time ago.
AEOREMA
http://cheerfultwentyfirst.exposecms.com/news/global-reach
Sounds encouraging. I am a holder of Aeorema. The company is a profitable, cash generative, dividend paying micro-cap. The company is growing and has a very solid balance sheet with no debt.
No comments:
Post a Comment