Account gamble
Ladies Pride
John Bull
There is a snag about specula ting in small companies. The market in the shares tends to be very narrow and often the bulk of the equity is held by the directors. As a result, there are obvious difficulties in dealing.
I looked at these points, carefully however, before I chose as my speculation for the next account, Ladies Pride Outerware. The answer was that, although there was only one jobber the spread (buying and selling) for 2,500 shares is 87p-93p. So one need not be put off by the comparitively small size of the group. (It is capitalised at £2.4 million).
Now let us turn to the reason why I picked Ladies Pride.
Firstly, I believe that the figures for the year to November 30, when they are published, will give, a useful fillip to the share price. Here are the facts: last year Ladies Pride made £388,000 pre-tax and in the first half of the current period pre-tax profits were £239,000 (an in crease of 36i per cent). And in July, the directors said, "a high level of activity for the 'remainder of the year is assured."
Now Ladies Pride made £213,000 in the final half last year. So, the very least I shall go for is £260,000 this time. On this basis, overall pre-tax profits should be about £500,000. Earn ings were out at 56 per cent against 43.6 per cent and at 95p the P/E ratio thus drops to a humble 8. And I believe my estimate to be very conservative. The yield on a 22i per cent dividend is 4.5 per cent.
The shares are well backed by assets of 55p (in which price there is a large element of cash, and properties were last shown at cost or 1965 valuation). The trading record apart from one in 1969 has been good and obviously the board is growthorientated with recent additions made to plant and expansion of sales outlets. Incidentally, some 11 per cent of turnover Is exported by this Leicester-based knitted jersey specialist group.
First Last Account dealings dealings Day Dec. 29 Jan. 12 Jan. 23 Jan. 15 Jan. 26 Feb. 6 Jan. 29 Feb. 9 Feb. 20
Previous page
