Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

The Investment Column: Tough times for Tie Rack

Sameena Ahmad
Wednesday 15 October 1997 23:02 BST
Comments

Your support helps us to tell the story

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.

Your support makes all the difference.

It has been a tough few months for Tie Rack, the specialist retailer run by the ever-exuberant Roy Bishko. From a recent high of 203.5p in April the shares have been drifting down steadily as fears over the impact of the strong pound begin to take root.

Yesterday the shares fell a further 4.5p to 127p as the company confirmed the currency damage to its half-year results. Though underlying profits were up on the same period last year, the pre-tax figure in the six months to 17 August slumped from pounds 604,000 to just pounds 158,000. The currency hit to profit translation was pounds 500,000.

Then there was uncertainty caused by the surprise management changes which will see Nigel McGinley step down as chief executive to be replaced by two joint managing directors who have been promoted internally.

At the trading level, like-for-like sales were more or less flat in the first half and similar in current trading. The new joint venture in Japan broke even and the Knot Shop acquisition in the US offers the group the opportunity to sell branded ties in that format while concentrating on own-label in Tie Rack.

A programme to refurbish the 419-strong store portfolio is set to start though the company declined to put a cost on it yesterday. The company may also expand the Knot Shop format overseas. On expected full-year profits of pounds 8.8m, Tie Rack shares trade on a forward multiple of 12. Quite cheap for a well-managed company, though one increasingly dominated by Mr Bishko. Much depends on the future strength of sterling and how the new management team can prove themselves. Worth holding.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in