Shoe Zone Share Discussion Threads

[ayl30] 21/1/2016 17:56

uk.finance.yahoo.com/news/brantano-uk-collapses-2-000-155517871.html

Brantano bust!

[davebowler] 13/1/2016 11:48

Finncap;
While FY 2015 results were exactly in line with our expectations, weak Q1 2016 trading means our current FY 2016 EPS forecast has 5% downside risk. That said, the 11% drop in the price over the past week seems overdone to us, and we expect positive investor sentiment around the special dividend (total FY 2015 yield of 9.4%) and potential for higher capital return in future. We trim our PT from 236p to 223p but retain our Buy recommendation.

[topvest] 13/1/2016 11:27

It says to me LfL sales are down, but margins strong and working capital control good. Progress against strategic objectives is a different point entirely. Suggests current year forecasts will be lowered a tad on the back of this, but that's to be expected given the weather patterns. Hopefully we will get a write-up from Paul Scott shortly as he has covered this stock and he likes retailers.

[imranawan] 13/1/2016 10:42

As a holder I'll continue to hold. Results looked okay, and divi and special divi could be a sign of confidence.

Outlook statement like others have mentioned was a little vague and uncertain.

[whatgoesupcomesdown] 13/1/2016 10:36

Apologies. I thought you'd said H1. Regarding current trading:Current trading and OutlookShoe Zone's trading in the first quarter of the year has been challenging, amid the well documented high street trading conditions for clothing and footwear retailers. Despite this we have continued to make progress against our strategic objectives. Our stock position is well controlled and we have achieved strong gross margins choosing not to discount stock before Christmas as is usual for our business. We anticipate the full year effect of our new merchandise director will continue to improve our stock and cash position.

[whatgoesupcomesdown] 13/1/2016 09:59

Q1 was 6 months ago

[topvest] 13/1/2016 09:50

Yes, pleased with a 175p buy this morning. Not sure they have said that the current year is going to plan. Challenging Q1 is what I read but that's to be expected I guess given the weather. Overall, seem to be making solid progress and a chunky dividend on offer. At least the weather seems to have normalised in the last few days.

[whatgoesupcomesdown] 13/1/2016 09:06

I'm not really sure what you mean by big bounce as so far this is just undoing this week's drop. As if that was justified?

[salpara111] 13/1/2016 08:30

Hmm,
Not sure that it justified the big bounce.
Personally I am not going to take a stake but I guess that if I was already in I would probably hold.

[sphere25] 13/1/2016 08:21

Fallen from 215 to around 165 on expectations of a warning, yet SHOE have confirmed despite the (well documented) issues on the high street, the year gone has finished in line with expectations, and the new year is going to plan too.

So many positives:

- Store portfolio management: "opportunities to reduce rents and relocate to better sites and therefore continue to open larger, more profitable Grade 1 stores"

- overall e-commerce growth was significantly ahead of e-commerce market expectations

- merchandise director will continue to improve our stock and cash position

- The falling oil price is already having a positive impact on the cost of logistics and should also impact the price of raw materials thereby improving gross margins for the remainder of the year.

A few other bits and bobs in there, not to mention the special dividend, on top of a healthy normal dividend.

EPS of about 19p for current financial year so trading on a single digit pe. The expected 11.25 dividend would yield 5% at 220, that's without any more special dividends.

Is this the most exciting business out there - of course not, and we'll have to see how trading progresses through the year, but it really does look like the market has overreacted a great deal here.

I've been buying this morning. This is worth well north of £2 imo.

[masurenguy] 13/1/2016 08:08

Solid set of results with reduced costs, improved margins and significantly increased cash generation. Dividend of 9.7p plus special dividend of 6p. Forward outlook positive !

RNS Number: 6639L
13 January 2016
Shoe Zone plc

Final Results

Shoe Zone plc ("Shoe Zone", the "Company" or the "Group"), a leading UK specialist value footwear retailer, is pleased to announce its Final Results for the 52 weeks ended 3 October 2015.

Financial Highlights

-- Revenue reduced by 3.5% to £166.8m (2014: GBP172.9m) reflecting the planned closure of loss making stores and difficult trading conditions in H1 2015
-- Product gross margin strengthened to 61.5% (2014: 61.3%)
-- Profit before tax reduced by 3.4% to £10.1m (2014: GBP10.5m)
-- Earnings per share flat at 16.2p (2014: 16.1p)
-- Strong cash conversion with cash balance of £14.2m (2014: GBP9.1m)
-- Board proposing two dividends to be paid:

o Final dividend of 6.5p per share

o Special dividend of 6.0p per share

Operational Highlights
-- Excellent progress on strategic objectives:

o Store portfolio management improving profitability, with rents at lease renewal down 27.2%

o Product orders placed directly with overseas factories increased to 62.1% (2014: 53.1%), driving margin improvements

o 12 new store openings, 40 store refits creating an additional 28 Grade 1 stores

o Fully responsive upgraded website launched; mobile and tablet visits represented 66% of online traffic with conversion rates increasing across all devices

o Started selling in over 30 additional countries via Amazon and eBay
-- Post period end, opened six new stores with a further four refits

Current trading and Outlook

Shoe Zone's trading in the first quarter of the year has been challenging, amid the well documented high street trading conditions for clothing and footwear retailers. Despite this we have continued to make progress against our strategic objectives. Our stock position is well controlled and we have achieved strong gross margins choosing not to discount stock before Christmas as is usual for our business. We anticipate the full year effect of our new merchandise director will continue to improve our stock and cash position.

Capital expenditure for the full year will be increased to c.£3m from the original £2m expectation to allow increased investment in stores, warehouse and IT. This includes refitting an additional 10 stores; significant investment in the Distribution Centre to allow for the increasing volume of e-commerce sales; and a roll out of new point of sale terminals which will be completed by 2018.

We have continued to make progress on the property portfolio having opened 6 new stores, with a further 4 stores having been refitted to our new concept so far this year. There are currently 4 new stores with provisional opening dates and a further 41 refits planned for 2016. By February, there will be an additional 56 Grade 1 stores converted through the introduction of new layouts and equipment. There will also be 33 enhanced Grade 1 stores that will have their style count increased from 400 to 450. The extra styles will predominantly be higher priced and consist of more fashionable footwear.

In August 2016, a trial "Project Big Box" will be launched in three stores. This will be twice the size of an average Grade 1 Shoe Zone store. The stores will benefit significantly from an extended product range, higher priced footwear and an enhanced environment. This will allow Shoe Zone to benefit from the out of town market as well as creating a strong new avenue for growth. Our successful e-commerce offering continues to grow successfully. E-commerce exclusive styles are being increased to 275 per season from the current 200, to satisfy the increasing demand for higher priced products.

The falling oil price is already having a positive impact on the cost of logistics and should also impact the price of raw materials thereby improving gross margins for the remainder of the year.

Anthony Smith, CEO of Shoe Zone, said: "Although 2015 was a difficult year for the footwear industry, we have achieved a solid performance. We have continued our focus on our strategic objectives and this has ensured we are well placed for the future. There is extensive work underway to increase the Grade 1 store portfolio and we are targeting an additional 56 stores to be operational by the beginning of February. We are also excited to be trialling "Project Big Box" in August 2016 which will involve 3 stores that will be twice the average size of a Grade 1 store. The trial stores will benefit from an extended product range, higher priced footwear and allow us to benefit from the out of town market. This trial will create a strong avenue for new growth outside of Shoe Zone's traditional portfolio."

[topvest] 13/1/2016 08:03

Not bad results. Challenging outlook as expected. Special dividend. A few interesting new initiatives. I'm in!

[topvest] 11/1/2016 17:33

Yes, same here.

[salpara111] 11/1/2016 13:55

Market clearly unsettled but look what happened with Supergroup.
The share price dropped 6% the day before its results and then bounced back on solid results.
I dont own here but have had it on my watch list for a while.
If Wednesday is promising I will invest.

[topvest] 11/1/2016 12:17

Expect a profit warning on Wed in my view. Weather must have impacted seasonal trading. This drop today only goes to reaffirm jitters on what Wed will say.

[pugugly] 11/1/2016 12:14

Looks like being hit in the same way as most UK retailers - Having been burnt too often in the early days by brokers forecasts I now treat most Anal-ysts forecasts with the scepticism they require.

Less than 10% imo shoudl be given credence - the $64K question is which ones.

Declaration - Now back below my selling price. Main danger here (imo) apart from trading is stock very illiqid and difficult to buy or sell in any reasonable quantity.

Meanwhile best wishes to all on this thread for a profitable New Year.

[meijiman] 11/1/2016 11:00

People might stop buying shoes when its rainy as they think the water will damage them if made of leather. But if the shoes are made of plastic then the water will simply run off the tops though there may be ingress through the soles, unless made of rubber and properly welted. It must be a major dilemma for punters as to whether to buy new shoes. Boots might be fine but for many work places these will not be acceptable.

[imranawan] 11/1/2016 10:54

Price drop this morning has been very disconcerting. Based on little volume, FY results published on Weds this week. Tempted to top up, but will wait for the results and outlook statement.

GLAH.

[topvest] 30/12/2015 12:41

16% upside. 25% or so downside in my view. Waiting and watching. Weather and their comments on the effect of the minimum wage are potentially big share price movers as is any dividend decision. Too risky at the moment to buy in my view, particularly when directors were selling a few at 190p just a couple of months ago.

[topvest] 30/12/2015 12:39

16% upside. 25% or so downside in my view. Waiting and watching. Weather and their comments on the effect of the minimum wage are potentially big share price movers as is any dividend decision. Too risky at the moment to buy in my view.

[masurenguy] 30/12/2015 10:21

We will obviously have to wait and see what Q1 (Oct - Dec 15) trading has been like over the Autumn/Christmas season and doubtless they will refer on this in their outlook commentary when the preliminaries are published in 2 weeks time.

Meanwhile, the 2 most recent broker forecasts (Oct 27th) from Finncap are Buy (TP 236p) and Numis Add (TP 210p). This provides a median estimate of 223p that's 16% ahead of the current shareprice.

[meijiman] 29/12/2015 18:16

When is the next update. ? Think that might be a good strategy-buy on poor update.

[topvest] 29/12/2015 17:50

I'm awaiting the update. Warm weather must have slaughtered the sale of seasonal boots in my opinion. May buy some on a poor update.

[masurenguy] 29/12/2015 16:31

The shareprice has drifted down by 6% from 208p over the past 10 days on a paltry average daily volume of less than 20,000 shares and no news since the year-end trading update at the end of October. Meanwhile Hendersons have upped their stake by 37% at the end of last month to 7.7%.

Full year results are due in a couple of weeks (Wednesday January 13th) and these should reflect the recent TU projections of expected sales "to be in the region of £166.8m (2014: £172.9m) reflecting the continued planned closure of loss making stores. The Board expects pre-tax profit for the period to be in line with expectations. The Group ended the year with 535 stores, having opened 18 and closed 28 during the period. The business continues to have strong cash conversion and closed the year with an approximate net cash balance of £14.2m (2014: £9.1m)."

If eps came in a circa 17.5p that would put them on a PER of just 11, a projected yield of 5% plus circa £14m in cash. Unless they announce a disappointing outlook for H1, due to poor Christmas sales, they look very good value at the current price of 193p.