Excellent Progress18 Apr 2007 11:34
The Independent Walker Greenbank Our view: Buy
This column covered Walker Greenbank a year ago. We were bullish on the wallcoverings and textiles group back then and right to be. In the 12 months that have followed, the company's shares have almost doubled.
The stock advanced again yesterday after the company posted an impressive set of annual results with all key indicators going in the right director. Profits were up (nearly threefold at the operating level to £2.2m) while debt and pension liabilities fell. It was also able to boast that in the first two months of its new financial year trading had been ahead of internal projections.
The turnaround at Walker Greenbank - triggered by an extensive restructuring launched in 2004 - now looks to be complete. This saw the management get out of loss-making, low-margin business and focus on upmarket brands which enjoy good profit margins.
Despite the rise in the stock over the past year, now is no time for investors to be cashing in their chips. There is plenty more upside. The fact that Alan Dix, the group's finance director, bought 42,000 shares at 47.5p yesterday, taking his total holding to 112,000, underlines this.
All Walker Greenbank divisions are now profitable. Also fashion trends are going the company's way. Minimalism is out and the group's flowery patterns, fabrics and wallpapers are in vogue in a big way. Fashion-trend reversals tend to last for a while so the group can expect to enjoy its benefit