At last the news many shareholders and former share holders have been waiting for, the disposal of all of its joplings stores/Assets.

This should raise considerable capital to roll out the brand 'The Perfume Shop' and also provide capital re-investment for its De Gruchy department store in Jersey.

Heres the link, http://www.uk-wire.com/cgi-bin/articles/200407121000027197A.html

The company will be much more focussed and I can see a re- rating of its price from here.

I am once again buying into this excelent growth story.

DYOR, you are responsible for the timing and selling of your buying actions.

Should have plenty of forward momentum after today.

cheers GF.

Merchant Retail - Monday 12th July 2004

Merchant Retail has bitten the bullet over its underperforming department stores chain Joplings and today's announcement that it is withdrawing from the business to focus on The Perfume Shop was welcomed in the market. The shares rose 4p on the news to 149p. The financial implications of the strategic U-turn are not immediately apparent but long term this is good news for shareholders and the shares look good value, writes Tom Stevenson.


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Merchant Retail said this morning that it is pulling out of department stores on the UK mainland (ie excluding the de Gruchy site in Jersey). The sale of the biggest of its stores - Tynedale Park - is already in the bag and another site is in the process of closing down prior to a sale this autumn of the freehold in Leamington Spa. That leaves two more sites in Sunderland and Hexham to be sold, hopefully as going concerns.

It's not how you would choose to sell any asset - as a very public forced seller - but the 'offer we couldn't refuse' of 17m for Merchant Retail's Tynedale Park retail site meant the rest of the division was not viable on its own. Lumping all the overheads of the department store division on two stores in the north-east would make their already difficult task impossible.

The offer price compared with a book value of 6.2m and was was around 10 times pre-interest, tax and divisional central costs profits of 1.6m.

Having already announced that the Leamington Spa site is up for sale, with a price north of the book value of 2.3m likely, the company already has around 20m of the division's 25m asset value accounted for. Getting the final 5m, however, will be quite another matter with justifiably despondent staff unlikely to pull out all the stops to maximise returns for the shareholders who they probably perceive to have sold them down the river.

That is why the financial implications of today's deal are unclear. In the year to March 2004 Joplings made 3.9m before interest, tax and divisional costs, the latter being about 1.8m in the year. In addition a chargecard business which ran across all four sites contributed a further 0.8m.

Whether it gets 20m or 25m or somewhere in between, earnings per share looks like taking a hit this year and next although analysts are understood to be leaving their forecasts unchanged for the time being.

On that basis, the shares at 149p trade on a forward price-earnings ratio of 12, falling to 11.

With the company pared down to its fast-growing Perfume Shop core, that is arguably too cheap. In the year to March, sales at TPS grew by 22%, a 10% like-for-like increase, and profits surged ahead by 30%. If you assume that a 15 times multiple is not unreasonable for that kind of growth then the shares should probably trade closer to 200p than the current price.

With so much uncertainty surrounding the department store disposals there's significant risk here, and the recent entry of Peacock into the perfume niche has increased the competitive threat, but the shares look good speculative value.BUY.

cheers GF.

Ticked ahead this morning.

cheers GF.

Tipped in todays Investors chronicle as one the City have missed. Going cheap they say.

cheers GF.

GF,

I don't find any inspiration in this chart!

Andy please, is that all you go on. Come on man lighten up, please read the previous posts.

This is a long term winner, its a fantastic growth share and will be packed full of cash in the not to near distant future. In these markets cash and earnings are king.

cheers GF.

I bet this one like a lot in the retail sector hasnt been affected by poor sales over the summer period. Ever known a women to cut back on the slap she puts on!. Economists call it inelastic demand.

cheers GF.

A nice move up in this one this morning, hoping for a prolonged move in the share price northwards.

cheers GF.

Got in at more or less bottom, chart looking very good and been some big volume over the last few days.



cheers GF.

Life smells sweet at Merchant Retail
MoneyAM
Merchant Retail Group, the specialist perfume retailer and department stores group, has reported an 82% increase in first half pretax profit.

For the six months to September 25th the group made a pretax profit of 5.74m, up from 3.16m last time, on sales (including VAT) up 12% to 77.65m.

A dividend of 1p was declared, up 33% from a year earlier and payable from earnings per share of 4.29p, up 113%.

MRG said the outcome for the full year is as usual heavily dependent upon a successful Christmas trading period.

In July the group announced plans to sell all its UK department stores and concentrate on its 100 The Perfume Shop stores and its De Gruchy outlet in Jersey.

This process is now well underway. MRG's Leamington store was sold for 4.6m, while a deal to sell its Tynedale Park store to Tesco for 17m is expected to complete by year end.


cheers GF.

Yipee, just shows patience pays off.

Monday Closing Market: predator sniffs out Merchant Retail

Published: 17:27 Monday 23 May 2005 By: Dylan Lobo, Stockmarket Reporter


The FTSE 100 posted its fifth successive gain and there was some late excitement in the small caps after Merchant Retail said it was in bid talks, but beleaguered Jarvis came under more pressure after reaching a tentative agreement with one of its lenders.

Merchant Retail (MRT) surged 22.5p to 192p after the specialist perfume retailer and department store operator told the City, shortly before close, that it was in advanced talks with a third party that could lead to a takeover.

Merchant revealed that the interested party had indicated an offer price of 197p per share, which would include any final dividend proposed by the board.


cheers GF.

Well done GF, I rode this one sold out first thing this morning. Thanks once again for your informative posts.

Same here chiva sold out for a lovely profit. Nice to get a reward like this in timid markets.

cheers GF.