Walker Greenbank continues to deliver relentless progress, positively confronting the various challenges in its market place. Management has achieved consistent organic growth through investment in new collections and specialist skills. Today's strong interim results reinforce the conservative nature of current market estimates.
Walker Greenbank has come through another challenging half year, with a positive set of trading figures. Group revenue is up by 11.4% year-on-year to £45.8m and adjusted pre-tax profits by 12.3% to £3.68m, comfortably above our £3.5-3.6m target range. Again the emphasis has been on investment, with new collections and extended printing facilities fuelling the growth. We look for a sound performance during the key autumn selling period, after which we are hopeful of lifting our fullyear profit estimates. The interim dividend has been raised by 26%, underlining management confidence about future trading.
There has been little change to group strategy. In addition to new collections for the core Brands, there is further extension into children’s ranges, while the new collection from Anthology includes fabrics alongside the wallcoverings. Meanwhile, investment in new techniques across the Manufacturing division, especially digital printing, provides greater flexibility for in-house and third-party designers. Key appointments in such areas as design and licence, plus the recent upgrading of the group websites add to the growth potential.
There was a seasonal £0.6m outflow over the half year, to reflect inventory build-up ahead of the autumn selling season. We continue to look for net funds of around £1.5m at January 2016.
The shares are currently trading at a discount to larger groups in its sector (17.2x CY15 EPS vs 18.6x), but at a small premium to other smaller company peers (13.5x). The group’s impressive long-term record and sound growth outlook fully justify the rating. Recent weakness taking the share price some 17% from its July peak provides an interesting buying opportunity.