Limited scope for Hamleys growth
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Your support makes all the difference.Hamleys, the toy retailer, met the City's best expectations yesterday with a sparkling 110 per cent rise in pre-tax profits to £5.6m for the year to January. Turnover rose 25 per cent to £26.2m.
Hamleys has the advantage of a unique and strong brand name in its Regent Street and Covent Garden stores, which should continue to underwrite solid performance. The current weak level of the pound should also result in more spending from tourists.
Opportunities for more sales and profit come from extending the number of retail outlets. The company is looking to open more stores at airport sites. It has already done so at Heathrow and will open another at Amsterdam's Schiphol airport. The company also expects to generate more profits from its House of Toys concessions based in House of Fraser stores.
Analysts are predicting £5.6m for 1995, with £6m for 1996. However, as with other retailers, a lot depends on the way the economy turns and when that illusive feel-good factor returns. Hamleys' problem is that toy sales are particularly sensitive to the current fragile state of consumer confidence.
Nonetheless the shares, up 10p to 192p yesterday, stand on a forward multiple of 10.5, which, given the company's strengths, looks a little cheap despite the mixed outlook.
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