Shoe Zone - Looking Hot

Monday, 15th October 2018 09:20 - by Rajan Dhall

This morning Shoe Zone sent out its latest full year trading update and it makes for good reading as the discount shoe retailer bucks the market trend (for retailers) and beats guidance. 

The Co. expects to report revenues for the 52 week period of approximately £161 million (2017: £157.8 million), growth of 1.8%.

The Co. expects to report a full year Profit before Tax for the year ahead of market expectations and in excess of £11.0m.

The Group continues to demonstrate strong cash conversion and closed the year with an approximate net cash balance of £15.7m (2017: £11.8m).  

The Board anticipates that £4m of excess cash will be distributed as a Special Dividend to shareholders in March 2019, subject to approval at the Annual General Meeting.

Nick Davis, Chief Executive of Shoe Zone PLC, commented: "The new financial year has started well and there are a further 14 Big Box openings planned. We look forward to updating shareholders on progress at the time of our Final Results in January."

Having a look at the weekly chart its clear that some investors were not expecting results to go so well or that the news may have been priced in. It seems they may have been wrong and I think the 188p and even the 200p level may be the next target. Watch out for resistance for a move higher. Longer-term if performance stays this good we could see a break and then look for levels of 230p at the old highs. 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.