Bottom Line: Patience needed at Brown & Jackson
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.LAST May we tipped Brown & Jackson, the Poundstretcher discount stores group, warning that while it was 'a risky stretcher case' the shares looked temptingly cheap at 9p. Ten months on the shares are 15 1/2 p, giving a 72 per cent profit.
B&J meanwhile is still very much in the invalid class. By issuing results for the 15 months to 31 December (thereby including two Christmases), it was able to show a small profit.
Counting the last 12 months alone, however, it lost pounds 6.6m on sales that shrank by pounds 10m to pounds 167m. There is a token final dividend of 0.1p a share.
The new management, led by Ian Gray, formerly of Thorn EMI, says it is meeting cash targets and getting to grips with the messy, unappealing, undisciplined stores. Regular lines and 'special offer areas' have been introduced.
New scanning equipment has pinpointed what makes money (toiletries, stationery and video tapes) and what does not (children's clothes and shoes). Stock levels have been cut by 20 per cent.
Scanning has now been introduced into 152 of the 230 shops. The entire chain should be completed by this July.
The good news is that after last year's declines, sales in the first quarter of the new year are running 6 per cent ahead of last time. So far in March they are up 12 per cent. Don't get over-excited by this growth rate: a lot of retailers have had a good March as the sunny weather lures shoppers out of hibernation.
Shareholders may be tempted to take a bit of profit on their investment - turning this lacklustre business around is going to be a long slog. But patient investors should give Mr Gray the benefit of the doubt.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments