03/08/2005
Wallpaper is currently as fashionable as the Conservative Party, but this maker of premium wall coverings and fabrics is detecting an upswing in popularity for its products among interior designers. Walker Greenbank, which has not made a profit for five years, is hoping this will mark a return to profitable growth. New broker Teather & Greenwood predicts that a surplus will be made next year. Two years ago the group bought rival Sanderson from the receivers for £5.5m, giving the company four major brands: Zoffany, William Morris, Sanderson and Harlequin. The latter has been repositioned and is now the most popular brand at John Lewis. Walker Greenbank aims to increase exports – most sales are currently in the UK – and develop other sources of income via licensing and direct contracts with hotels. Annual costs of £800,000 have been cut out of the business. This should improve the bottom line this year, even if sales remain steady at around £50m, after the disposal of non-core businesses. The group also hopes to outsource more manufacture. Despite this restructuring, risks remain: the pension deficit stands at £11.3m; and net debts are £10.7m. On the positive side, the group’s net assets of £7.1m include £4.7m of freehold property and the remarkable William Morris design archive, valued conservatively at £4.3m. That means the business is worth £1.2m, even after the recent share price rise. With this return to profitable growth the shares are worth a speculation.
| Market cap: | £10.2m |
| PE Forecast: | n/a |
| Share price: | 17.25p |
| AIM | £9m |
15.25p
|
-0.25p
|
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| Other company articles: |
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