Shoe Zone said currency headwinds impacted statutory EPS. finnCap downgraded forecasts & TP
Companies: Shoe Zone PLC
Shares in Shoe Zone fell 5% this morning following disappointing half-year results that showed marginally lower revenue year-on-year, and a collapse in pre-tax profits to just £0.3m.
Total revenues decreased 2.2% in the year, which Shoe Zone said was due to its rationalisation strategy for its retail store estate, resulting in an underlying pre-tax profit of £1.3m and a statutory PBT of £0.3m.
Despite the fall in EPS to just 0.50p, the firm still raised its interim dividend to 3.4p per share, up 3% on last year's payout.
Broker finnCap downgraded its FY17E PBT and EPS forecasts by 5% and 6% respectively following the news, saying the disappointing half-year had left the firm with much to do in its second-half to meet previous forecasts.
"We now forecast 3-year adj. EPS CAGR of -0.2%. With sentiment having been supported by high yield expectations, diminishing prospects for a special dividend this year could put the share price on the back foot. We reduce our price target by 10% to 170p."
CEO Nick Davis said he was pleased with the performance, as he cited the Brexit-induced fall in the value of Sterling as having impacted the Group's statutory profits. He added that trading since the end of the period had been positive:
"The Group has traded broadly in line with management's expectations since the period end and the Board continues to look to the future with confidence."
