Companies: CFN    PEA    TPT   

Despite continued fears of a slowdown in high street spending, broker Numis has published a series of positive notes relating to individual UK retailers in recent weeks.

The ever-dependable Topps Tiles was among those impressing the retail team as it weighed in with powerful figures for the six months to 2 April. With profits rising some 30 per cent to £20 million during the period, Topps surpassed market expectations. Encouragingly, the second half is reported to have started in much the same vein and Numis has thus raised its target price for the shares to 205p (they currently change hands for 186.5p). This is reasoned to be ‘not particularly aggressive for a stock yielding around six per cent and growing its earnings by over 20 per cent’.

Though its full year results fell short of Numis forecasts, value retailer Peacocks also received the broker’s seal of approval. ‘Profits came in around £900,000 short of our forecasts at £38.6 million,’ analyst Ian McDonald explains. ‘This was growth of 7.2 per cent on last year, no mean feat in this difficult clothing market.’

For 2005/06 profits are slated to reach £44 million and, at current levels, McDonald believes ‘the stock looks undervalued on all valuation benchmarks.’ As such, he advises clients to add to their holdings.

Coffee bar operator Caffe Nero has now been marked as a reduce, however, on the back of a bullish trading update which proclaimed that the business should ‘materially out-perform market expectations in terms of profit’ for the year to May 2005. Numis’ recommendation is on account of ‘the premium rating’ the stock currently enjoys.