Alexandra Share Discussion Threads

[wirralowl] 10/5/2003 11:11

yeah, thanks boringshortinhaystack. Interesting that we are still trading at about a 20% discount to NAV ! Shows how much we've still got to go, when you consider this is a profitable company, paying a big divi, and with improving prospects.

[doubleorquits] 10/5/2003 00:43

Thanks for that, boringshortinhaystak.

[boringshortinhaystak] 09/5/2003 11:45

Alexandra

High Since:77.5p, Low Since:77.5p
Tip Period Price @ Tip Price Now % chg Recommendation
8 May 2003 to date 77.5p 77.5p 0.00% High Risk, Medium Term, Buy


Dressing for recovery
By Andrew Hore
Thu 8 May 2003 07:08:12

(Nothing-Ventured.com) - Retail financial and service companies project themselves as "people industries" and increasingly make sure that their staff reflect the right image by dressing in stylish uniforms.

This trend towards corporate outfits has helped clothing supplier Alexandra offset a decline in demand for its industrial workwear.

At the turn of the decade Alexandra had to take some tough decisions. It manufactured most of its overalls and uniforms but profit margins were declining. It closed its manufacturing facilities and moved production overseas. The benefits of this move are now showing through.

The latest results mark a sharp turnaround in the company's fortunes. In the year to January 2003, Alexandra's pre-tax profit nearly doubled from £2.04m to £3.88m on a 2% fall in turnover to £73.4m. Alexandra sourced more than 95% of clothing overseas and the reduction in costs helped maintain gross margins at just below 40%. Overheads have been cut, thereby enabling profits to recover.

There was a 4% fall in selling prices during the year. This reflects the weakening economy and the reduction in sales to industry, once a major market for Alexandra, as industrial clothing tended to be more expensive.

The increasing exposure to the corporate clothing market has helped Alexandra to prosper in these tough times. Six years ago Alexandra generated nothing from this sector. Now it accounts for 30% of turnover. That is set to rise over the coming years. Customers include caterer Compass, delivery firm DHL and Transco.

The decline in prices has been partially offset by a 2.5% increase in volumes, reflecting its gains in market share.

The mail order business still generates one-third of turnover and has more than 200,000 active customers. The rest of the turnover comes from major accounts with the private and public sectors.

The workwear market is tough but, with a 23% market share, Alexandra is in a strong position to lead consolidation. Chief executive Julian Budd says he is interested in making acquisitions but is choosy. He is interested only in companies with a significant level of contractual business.

Borrowings have been a worry for the company. Alexandra reduced its net debt by £2.1m last year, but that still leaves £19.9m. Cash generated from operations and reductions in stock levels helped to cut borrowings.

Alexandra is trying to sell two former factories in Scotland. It has received a conditional offer - just above book value of £750,000 - on the smaller factory. If Alexandra sells both factories that should bring in more than £2m to reduce borrowings further. Even without both properties being sold, analysts expect further cash generation will cut net debt to £17.5m at the end of this year.

The company's net asset value is £28m, which is above the present market capitalisation of £23m.

Broker Evolution Beeson Gregory forecasts a profit of £4.5m for the year to January 2004. At 68p, the shares are trading at eight times earnings.

Management maintained the dividend at 4.6p a share, giving a yield of 6.8%. The dividend was barely covered in the previous year but that cover has increased to 1.8 times. If things go to plan this year then there should be scope for the dividend to increase and debt to fall.

Alexandra is still recovering and peak profits of £8.2m - made in 1999-2000 - are some way off. At this stage, an investment in the shares remains speculative but it appears that the recovery should continue. Buy for that recovery.

From a technical perspective, Alexandra's share price chart is looking bullish. The price has broken through the uptrend, suggesting that the shares should start to rise even more strongly.

A positive golden cross has also appeared on the chart with the 30-day moving average crosssing over the 100-day moving average supported by strong volume. Set a stop-loss at 65p. Expect resistance first at 90p and then at 126p

[penpont] 04/5/2003 13:39

Tipped in The Business today as buy for continued recovery.

[penpont] 01/5/2003 21:55

These are the lastest available forecasts from the housebroker from HS, but they havent been updated post results:

Evolution Beeson Gregory Ltd [R] 01-03-03 BUY 5.00 10.40 5.20

It still looks to me like there is a good case for a reappraisal of the value of the shares given the extremely creditable results.

The forward yield for example at todays offer is 7.3%.

[doubleorquits] 01/5/2003 19:46

With an EPS of 8.2p (I haven't got forward figures yet) they would be on a PE of only 12 historic even at £1.

[wirralowl] 01/5/2003 17:41

Also suggested in Shares Mag by David Linton as being a perfect example of an inverted head and shoulders with an inferred target of at least £1

[johnpaul1] 01/5/2003 16:59

"further rise to 126p is signalled" - investech.com

[wirralowl] 29/4/2003 08:12

Yep, nice to have a company who can meet what were quite ambitious targets at the interim stage - and forward outlook is very positive too. I'm continuing to hold.

[penpont] 29/4/2003 07:56

Results look very satisfactory and outlook statement confident.

[washbrook] 29/4/2003 07:27

Operating Profit +60.7% £5.25m pre tax 3.88m
eps +78.3% 8.2p
dividend unchanged 4.6p.

Dividend

As indicated at the interim stage, the Board is proposing a final dividend of
3.0p per share (2002: 1.9p) making, with the interim dividend of 1.6p (2002:
2.7p), a maintained total dividend for the year of 4.6p (2002: 4.6p). If
approved at the AGM on 24 June 2003 the final dividend will be paid on 11 July
2003 to shareholders on the register at 13 June 2003.

[washbrook] 28/4/2003 16:42

Profit forecast
£3.9 Profit
8.1p eps
4.6p dividend
I think that they will beet these figs.
I do not hold the share, but I would think their will be buyers if no disapointments.
Good luck to all who sail in her..

[penpont] 28/4/2003 15:56

Results tomorrow. If final divi is as predicted (3p) there's 4.5% on offer here on that alone between now and mid july.

Hopefully we'll get at least a 'coping well in challenging markets' type statement and with luck a reasonably +ve outlook which should send price on.

80p seems poss in the not too distant future all being well.

[penpont] 16/4/2003 17:42

Results out 29 April - a bit earlier than last year, hope thats a good sign.

[johnpaul1] 16/4/2003 00:06

wow is all i can say. this looks good, in from 49p. please no bad news.

[pav 1] 15/4/2003 09:09

nudging up nice and slowly, results out soon anyone or am i the only one holding.

[penpont] 11/4/2003 00:56

Interim statement contained the following:

'An interim dividend of 1.6 p per share will be paid and the Board expects to
be able to recommend a final payment of not less than 3 p per share, making a maintained 4.6p for the year.'

I'd be happy with the 3p - anything else would be a bonus.

[dennis russell] 11/4/2003 00:48

I'm looking for a final dividend of 3.4p to make the annual total a round 5.0p. Definitely one to tuck away for a nice long-term return.

[doubleorquits] 19/3/2003 07:34

The problem I have with some of the smaller shares is the way rises are often distorted by widening of the spread. In spite of yesterday's 10% gain the shares appear to have gone from a 2p spread to a 5p spread - in effect sellers are only 2p better off after yesterday's gains although I accept it is possible to trade within the spread.

Nevertheless, as you say, rise long overdue, particularly as numbers and divi should be in the bag if the brokers are worth their salt.

[penpont] 18/3/2003 21:42

Last years results weren't until 7th May so are a bit of a way off yet.

Year end was 31/1 so results as per housebroker above should hopefully be in the bag. I've thought the shares have looked cheap for some time now and wasn't surprised at the jump today.

[pav 1] 18/3/2003 21:06

dennis do you have a date for the results. cheers pav1

[dennis russell] 18/3/2003 17:19

Interesting jump today - a buy of a few thousand shares seems to have produced a 10% increase. Results due in a couple of weeks.

[doubleorquits] 16/2/2003 19:41

According to Yahoo Beeson Gregory (I take it theirs is the bigger f/c) have got 8.28p and 10.4p EPS. That puts them on forward PE of under 7 falling to just over 5. Their dividend yield is greater than the PE and nearly 10% for 2004 if EVBG are correct. The debt reduction could be quite important too and if Sept sales increase of 8% has set a pattern (and I guess it might have if the brokers are quoting their figures for February) then these are cheap.

As a matter of interest which source did you use for your forecasts?