Jacques Vert has jumped by near a quarter after the womenswear retailer returned to profit and paid its first dividend since 1995.
The company - whose brands comprise Jacques Vert, Windsmoor, Planet and Precis - said full year like for like sales had climbed 2.8% and it made a profit of £5m compared to a £3.8m loss. Chairman Stever Bodger said returning to the dividend list was a sign of the confidence the board had in the business. The first nine weeks of the new financial year have started well, although he admitted the outlook for retail for the rest of the year was difficult to predict:
We are confident however that we are in a good position to deal with any difficulties that we may encounter and indeed, to take advantage of opportunities that may arise.
It is continuing to control stock levels and costs, although it plans a £3m investment in its online platform and other systems over the next 18 months. The company's shares have added 3.5p to 17.25p, and Seymour Pierce repeated its buy recommendation. Analyst Freddie George said:
These were outstanding results - underlying pre-tax profits for the year ended April more than doubled and came in better than expected. Results benefited from a good performance from the Jacques Vert and Precis brands, the latter following a broadening of ranges, and strong growth in internet sales from a low base.
Encouragingly, the first nine weeks of the current year have gone well and like for likes have increased by 1.5% despite the distractions of the World Cup and the Budget. In view of the better than expected results and the cash balance of £12.6m, more than £3m better than the Seymour Pierce forecast, the company is paying a dividend of 0.65p per share.
The stock, in our view, is significantly undervalued relative to peers, thegGeneral retail sector and close peer, Alexon. We believe the stock should have a similar rating to its peer group, which implies a price target of 28p.
