BROKER UPDATE20 May 2010 11:25
Styles & Wood Group (STY, 18.75p, £11.59m), the UK provider of property support to UK retailers, reports an IMS for the 1 January 2010 to 18 May 2010. Trading conditions in the period remained challenging with customers remaining cautious as to property investment decisions. The group has made progress in construction services with the office and banking sectors, which has offset a decline in the food and retail sectors. The support services division has suffered from reduced volumes and spending from its retail customers. Management expects revenues will have a significant weighting towards H2. Net cash stood at £4.1m as at 18 May 2010 (FY09: £8.4m). We believe there is scope for contracts to be delayed into 2011. We expect the current 2010 PBT and EPS estimates to reduce from £1.1m and 1.2p.Assuming EPS of 12p is achieved, the stock trades on 15.6x, a premium to the market. The scope for downgrades, the high rating and challenging market conditions encourages us to reduce our recommendation to a SELL.