Yesterday afternoon’s news from the iconic fashion retail group, stating that it had enjoyed good trading up to the end of October and, more importantly, that it had tied up its financing facility, has today spurred the company’s broker to declare a 500p Target Price for its shares, currently just 112p after hitting 118p yesterday.
Analyst Wayne Brown, at Liberum Capital, stated that the group has provided three key level assurances – strong trading, a new banking facility, and also the appointment of a new auditor.
He was impressed that net debt had fallen £25m since 1 October to just £13m at 13 December.
For the current year to end April 2023 he is looking for £643m (£610m) sales, lower pre-tax profits (as expected) of £10.4m (£20.4m), earnings of 9.7p (35.0p) and a per share dividend of 3.2p (nil).
However, for the coming year he sees quick recovery to £682m sales, £20.4m profits, 18.9p earnings and a 6.3p dividend.
For the 2025 year he goes for £726m revenues, £35.6m profits, 33.1p earnings and a 11.0p dividend.
Based upon the Liberum estimates it is obvious why he has such a high Target Price, which could see the shares double, even treble over the next year or so.