Broker snap: Little value left in JJB, says Charles Stanley

Charles Stanley reckons that troubled sports retailer JJB Sports will likely follow in the path of High Street shop Blacks Leisure which went into administration and was sold earlier this year.The company put itself up for sale on Thursday after having failed to raise the funds needed to attempt a turnaround of the business. It warned investors that debt levels meant any purchase could still mean shares would become worthless. Shares sank over 70% in morning trade to just 0.67p, compared with the 52-week high of 21p reached nearly a year ago."Having consistently urged investors for the past 2.5 years to avoid the stock, seeing little equity value left in the company, we now put our recommendation under review with a view to suspending or ceasing coverage," said analyst Peter Smedley.The broker's previous recommendation was 'sell' and the target price was five pence."We suspect that JJB will now follow a similar process as Blacks Leisure i.e. a likely administration process followed by the possible sale of parts of its business," Smedley said.BC