Shoe Zone Share Discussion Threads

[masurenguy] 15/8/2014 10:04

Still doesn't work for me dixies ! Oh well, never mind.

[masurenguy] 15/8/2014 09:31

dixies: It works if you copy and paste without

nw99: Yield as provided by sharewatch

Link still does not work in relation to SHOE without it.

nw99 - please can you post a weblink or cut and paste the information !

[nw99] 15/8/2014 09:09

Yield as provided by sharewatch

[dixies] 15/8/2014 09:02

It works if you copy and paste without hxxp://

2014 2015
eps div eps div
11-08-14 BUY 17.80 3.60 20.60 12.30 .

[masurenguy] 15/8/2014 08:20

The above link does not work in relation to SHOE. This link to HL tabulates broker forecasts from Numis and Beaufort.

[masurenguy] 14/8/2014 13:50

nw99 - 9: very good yield

I can't find any dividend information in either the AD or the interims. Where have you found source data on the yield and can you provide a weblink to this. TIA

[nw99] 11/8/2014 08:12

New sharewatch tip looks good and very good yield

[masurenguy] 24/7/2014 09:09

Interesting to see that Gervais Williams Diverse Income Trust has increased their holding by 12%. Shoe Zone is now joint sixth largest in the funds shareholding.

[pjhutchy] 23/7/2014 23:47

Looks like a solid company this and great value products which will always be in demand. I've heard a lot of good things about their steel toecap workboots

[masurenguy] 25/6/2014 08:24

Shoe Zone takes forward step

Shoe Zone posted a leap in profits today as the retail chain - whose products sell for under £10 on average - continues to enjoy a decent start to life as a stock market company. The Leicester-based firm, which has 554 stores in the UK and Ireland and employs 4,100 staff, s aw pre-tax profits hit £2.7m in the 6 months to April 4, up from £200,000 a year earlier. It continues to grow after it added 3 new stores since October, refitted a further 19 shops and launched on Amazon.

The company, which was founded by brothers Michael and Christopher Smith in 1980, joined the stock market in May at 160p a share and now stands at 176.5p, giving it a valuation of £88.4m. Shoe Zone claims it sells 20m pairs of shoes per year, and in 2013 said its average retail price for a pair of shoes was £9.77. The business is able to maintain low prices through volume sales, direct sourcing from factories and by carrying a low product line.

The firm said it would continue its refit programme and would open new shops in towns and cities with the appropriate demographic mix. Like-for-like sales in the 10 weeks to June 14 have been in line with expectations, with online trading ahead of market growth forecasts. Revenues fell in the half-year results, from £98.9m to £82.9m, after the company closed a number of temporary sites. Last year Shoe Zone posted annual pre-tax profits of £9.3m in the year to October 5, a 66% increase on the previous 12 months on revenues of £193.9m.

[masurenguy] 24/6/2014 12:59

Paul Scott provided an interesting summary of the SHOE results today.

"This is a mainly UK discount shoe retailer, which recently floated on AIM. I've been having a read through the AIM Admission Document to understand the background. Interim results for the six months to 5 April 2014 have been published this morning. It's a family controlled company, with the IPO releasing 22.5m shares at 160p to new shareholders. That leaves the Smith family with 55%. No new cash was raised for the company, it was the family selling down part of their interest but retaining control. So it's really a private company that happens to have a Listing - not ideal in my opinion.

At 175p the shares are usefully ahead of the 160p IPO price. The company is based in Leicester, and has 553 stores, selling shoes for an average price of £9.77! I must visit one of their stores, as I'm clearly being profligate by paying 3-5 times that amount at Marks & Spencer! Unfortunately there are no broker forecasts that I can find, so it's a bit difficult to value the shares on a PER basis. Today's interim results show turnover down a surprisingly large amount, from £98.9m to £82.9m for the most recent H1, which is said to be due to the "planned closure of a number of temporary stores". That's a 16% drop, so there must have been a lot of temporary stores. I wonder how many they still have and if more closures are likely? I would need to know the ongoing scale of the business in order to value it.

A modest profit of £3.2m was reported for H1 this year (up from a £0.5m loss in the prior year H1).
So it's a low margin business by the looks of it, although it looks as if there might be an H2 bias to trading, so if the same pattern happens this year then full year profit might be heading towards £9-10m perhaps (based on a £6m profit in H2 last year). The company made 3.7p EPS in H1, so say double that for H2, and I'm getting a very rough estimate of about 11p for full year EPS (last year it did 6.9p). That would be a PER of 15.9, which is probably about the right price.

My quick Balance Sheet review is passed, with a sound working capital position of £41.3m current assets, representing a healthy 170% of the £24.2m current liabilities. So the FD will sleep easily at night. Bear in mind also that the interim period end of 5 April is only a fortnight after all the quarterly up-front rent & service charge invoices will have been paid on March quarter day (25 Mar). So being in a £5.9m net cash position at this time of year (near the lowest point in the year for cash) is a solid position to be in. Note there is a small pension deficit of £2.5m, but that is immaterial in my opinion and it's not an iceberg deficit either. I've checked the admission document and the total scheme is only about 10 times that figure. Although having said that, payments of £300k per half year are being made into the pension scheme, according to the cashflow statement, which I'm pretty sure doesn't go through the P&L. So that is a cash outflow which would otherwise have been used to pay divis.

Overall, I quite like this share, and it will go on my watch list. Discounters will remain in demand, as such a large proportion of the population live on low incomes, and are likely to continue to do so. So it shouldn't be affected much by competition or the macro economy overall - cheap shoes will always be necessary. Competition are likely to be Primark, George at ASDA, and the other supermarkets. Shoezone also sell online. The strength of sterling is helping UK non-food retailers at the moment, so margins will come under pressure if sterling weakens. The opportunity here is if the company out-performs, as it seems to be trading well, with the outlook statement saying "In the 10 weeks to 14 June 2014 since the half-year, our LFL's and margins have been in line with management's expectations. Online performance remains strong and continues to be ahead of market growth projections." Anyway, it looks quite a good business, but the shares don't scream value at me -
they're priced about right probably for the time being."

[masurenguy] 24/6/2014 12:50

RNS Number : 3204K
24 June 2014
Shoe Zone plc

Interim Results

Shoe Zone plc ("Shoe Zone" or the "Company"), a leading UK specialist value footwear retailer, is pleased to announce its maiden Interim Results for the six months ended 5 April 2014.

Financial Highlights

· Revenue of £82.9m (2013 H1: £98.9m)*

· Profit before tax increased to £2.7m (2013 H1: £0.2m)

· Earnings per share increased to 3.7p (2013 H1: 0.3p)

· Strong cash conversion. Net cash at 5/4/14 of £7.8m (6/4/13: £3.1m)

* This reduction in revenue reflects the planned closure of a number of temporary stores

Operational Highlights

Enhanced store portfolio with 3 openings, 2 relocations and 19 refits

Successfully launched on Amazon in November 2013 and achieving good results

Admitted to AIM on 23rd May 2014 through placing of 22,500,000 shares at 160p

Welcomed blue-chip shareholders to the register

Anthony Smith, Chief Executive of Shoe Zone plc, said: "I am pleased to report Shoe Zone's maiden set of Interim Results following our Admission to AIM on 23rd May 2014. The Company has had a good first half with profits significantly ahead of the same period last year combined with a high level of cash conversion. Our strong market position ensures we are well placed to benefit from any growth in the UK footwear market and the Board continues to look to the future with confidence."

More......:

[hazl] 18/6/2014 12:51

Yes. I have followed this since its float. No position either.

[masurenguy] 18/6/2014 12:45

New IPO by downmarket national footwear retailer Shoe Zone last month on May 23rd. The IPO was at 160p and at the current price of 176.5p the company has a market cap of £88m. Against last years pre-IPO post tax profit of circa £6.5m this puts them on a current PER of 13. No position here yet.

Interesting article from Verdict Retail.

Shoe Zone needs £50m IPO investment to reclaim relevance on UK high street

While floating the business will allow Shoe Zone to overhaul its brand image and invest in stores, which is long overdue, it has a huge amount of work to do to bring its offer in line with its value rivals. Value clothing specialists have become go-to destinations for footwear during a period when Shoe Zone has lost its relevance and appeal among consumers, calling for drastic measures to be taken with the £50m generated by the IPO.

Shoe Zone has revealed plans to float on AIM in a deal that could value the footwear retailer at up to £100m and generate the £50m it wishes to invest in the business. Though 2013 sales showcase some stability, the retailer has had a challenging five years, with a lack of both differentiation and out-of-date stores causing its UK market share to remain stagnant at 3.4% since 2012. Moreover, non-footwear specialists such as Matalan, the grocers and Primark have continued to invest in and improve their footwear ranges and store environments, causing Shoe Zone's proposition to fall out of favour with UK shoppers. However, a high number of administrations and store closures from value footwear specialists such as Barratts Priceless have left Shoe Zone in what could be an opportune position. It is now one of only a few footwear specialists in the value segment remaining on the high street, while many of its rivals such as TK Maxx, Matalan and the grocers are often positioned out of town, limiting the competition. If the investment is raised, the retailer must use the £50m wisely to capitalise on this gap in the market and become a destination.

Floating on AIM would present an opportunity for Shoe Zone to rationalise and improve its store portfolio, as well as overhaul its outdated and tired brand image. The size of its current 554 portfolio, with plans to open five new stores a year, is unnecessary, particularly during a period when more consumers are shopping across channels, reducing the need for more physical space. Stores nearing the end of their lease must be reviewed to protect the profitability of the chain, while investment in existing stores is vital, with the need for more contemporary shop fits, displays and visual merchandising important to win back lost customers. A more successful channel for Shoe Zone is its transactional website, so it must continue to invest in its multichannel facilities to cater to shoppers' increasing demands. Having made improvements to its website, and launching its own shop on Amazon, in 2013, online sales for the retailer jumped 27% that year, outperforming the total market. By further improving delivery times, and introducing editorial content and social media pages to engage with shoppers, Shoe Zone would change consumer perception of the brand more easily, draw in new shoppers and garner loyalty.

Shoe Zone has much to focus on in the UK, so Verdict recommends that it gets its domestic business in better shape ahead of investing in international expansion. However, it has highlighted European markets such as Spain's coastal regions and Poland for market entry, which are suitable markets for it to target over the next five years. In the meantime, it must be aware of competitor Deichmann growing its physical presence in both the UK and across Europe, as well as pushing its brand awareness via TV adverts, to minimise risk and maximise expansion opportunities when the time is right. Without this potential £50m investment, Shoe Zone would find it very challenging to stand out in the market and build its market share. If it does successfully float, the retailer must have a clear strategy on how best to invest in the business and re-spark interest in its offer.



Meanwhile Nick Bubb has mixed views:

Shoe Zone – a surprise entry in the retail IPO list
29 April, 2014 | By Nick Bubb

Shoe Zone has come in from left-field to enter the retailing IPO arena. I well remember the time when there was a big footwear sub-sector on the stock market, led by the ubiquitous Sears (of British Shoe Corporation fame) but including Stead & Simpson, George Oliver, Church & Co, Stylo and the infamous Ward White. Big retail conglomerates of the 1980s such as GUS and UDS also had footwear retail interests and even Debenhams at that time had exposure to the footwear market via the Lotus Shoes and Raynes operations.

Fast-forward 30 years and most of these high street names are long gone, although the family owned Clarks empire is still going with its strength in kids shoes. But these days many women seem to buy their shoes at a fashion retailer such as River Island, Next or New Look, although specialist chains like Schuh, Dune and Office successfully target the young fashion market. So who is this company called Shoe Zone that announced yesterday that it is seeking to float with a valuation of up to £100m? And how did it come to have as many as 554 stores? Formerly called Benson Shoes and acquired by the Smith family in 1980, this "value-oriented" Leicester-based business has expanded through a series of major acquisitions of failed high street rivals.

As chronicled by the invaluable Retail Week Knowledge Bank, the first big move was in November 2000 when the company completed the £6m acquisition of its Leicester neighbour, the chronically loss-making, publicly quoted Oliver Group. This added 258 shops to Benson's own portfolio of discount shoe stores, taking the group's total to 442 nationally (including Ireland). At that stage the corporate name was changed from Benson's to Shoe Zone Ltd. In September 2007 Shoe Zone became the UK's largest footwear retailing multiple when it acquired the former Co-op owned loss-making Shoefayre business from the administrators. The Shoefayre chain had shrunk to about 240 at the time of acquisition and that deal increased the Shoe Zone portfolio to nearly 650 shops. The Shoefayre acquisition had barely been digested when, in January 2008, Shoe Zone stepped in to rescue Stead & Simpson from administration, adding a further 330 stores to the burgeoning Shoe Zone network, taking it close to the 1,000 mark.

Following the Stead & Simpson acquisition there has been significant rationalisation of the Shoe Zone empire. By the end of 2009, the store network consisted of some 805 stores, comprising 559 Shoe Zone branches and 246 Stead & Simpson shops. In late 2012 the group closed 131 stores, mainly former Stead & Simpson outlets and then the holding company subsidiary was controversially placed in administration at the end of 2012. As a result, the store network was reduced to some 650 outlets by early 2013 and since then nearly 100 further stores have closed. But all this fancy footwork and shuffling on the store portfolio has had a decent impact on profitability. The group has reported pre-tax profits of £9.3m for the year to October 5 2013, up from just £5.6m in the previous year even though total sales only grew to £194m from £189m in the year before. And the focus on secondary locations has helped to reduce the average lease length on Shoe Zone's stores to just four years, so the business has a lot of flexibility in its store portfolio.

Apart from a low rent bill, what else has Shoe Zone got going for it? Well, it has good buying scale in China, so that it sells over 20m pairs of shoes a year at an average retail price per pair of less than £10. And although value footwear retailing isn't everyone's cup of tea, as it were, Shoe Zone has been able to attract no less a personage than Ian Filby, the chief executive of DFS (which has IPO ambitions of its own) to come on board as non-executive chairman.
Shoe Zone is, nevertheless, not exactly a growth stock, although it makes the obligatory noises about online and international growth potential.

However, investors are also looking for good income plays at this time of ultra-low interest rates and it looks like Shoe Zone should be able to have a good dividend pay-out ratio, given its lack of debt and good EBITDA to cash conversion. Whether a good dividend yield alone is enough to make institutions swallow up to half the Smith family holding in the IPO remains to be seen.

[masurenguy] 18/6/2014 12:38

Time for someone to set up a new SHOE thread.

Thread Closed



I set up this thread to monitor the company and subsequently took an initial position here @173.8p on 10/6/15 and added. I exited when I sold my final tranche @210p in May 2019.