MD writes...

Retailers: Picking over the Ruins
So Primark, Debenhams and Philip Green have waded in and bought most of what remained of Allders. Only about 10 stores including the Oxford street flagship still seek buyers. Interestingly, part of the Philip Green buy-motive was to expand the home furnishings side of BHS: seems a funny time to be getting into this area at present, what with the demise of Courts, Allders (and Laura Ashley being on the brink). But you know what they say: when all are moving one way, the shrewd investor goes the opposite direction.

Is it time to reappraise Invensys? This scribe thinks maybe.

Watchers of penny shares will have noted the recent (apparently short lived) strength in Invensys shares ahead of next week's announcement of their Q3 results (scheduled for 24/02/05).

Positives include renewed management focus on growing the business now that the fire fighting is almost over; companies previously earmarked for sale have been removed from the table; cash at hand has improved whilst debt maturities have been extended; key strength remains in a number of business areas (e.g. APV & Westinghouse); contracts are being won again; and the management succession is in place.

Negatives are fewer: margins suffered in the first half (explainable); turnover was down a tad; cash continued to be burnt at the operating level.

But at the end of the day this business has a turnover of >£3bn and operates in sectors where it is still a player. 2004/5 will prove to be the nadir (Editor: here's hoping).

UPDATE 27/02/2005: Well, no surprises - good or bad - in the Q3 results for Invensys (much personal relief in this quarter). Here’s to 2004/05 being the year they turned the corner.

The scribe and/or his family have shares in Invensys.

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