Fancy fashion accessorises retailer Laura Ashley (ALY) reveals pre-tax profit dropped from £6.3m to £0.1m in the year to 30 June, yet the share price jumps 11.1% to 4.8p.
Laura Ashley has sold its commercial property in Singapore for £30.2m to SB Investment, which was less than its valuation as the company has incurred an impairment charge of £4.7m.
The decision has yielded some rewards, including a £20.5m decline in liabilities, and will also help strengthen the company’s balance sheet.
Laura Ashley is still keen to expand into Asia but decided to go ahead with the disposal as the international and domestic retail environment is under pressure.
Investors may be relieved there was not another profit warning this year as profit margins were squeezed by a weaker pound while consumers are more cautious with their spending.
SQUEEZED SALES
Sales have declined from £277m to £257.2m with like-for-like revenue dipping 0.4%. In contrast, online sales have climbed from £57.3m to £59.7m.
The difficult trading conditions are expected to continue into the second half of 2018 with no dividend in the cards to reward the patience of shareholders and despite today's rise, the shares are trading at nearly a five-year low.
