Secondary Recommendation

French Connection - UK Wholesale very strong

April 2011

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

This month's results to 31 January came in ahead of the recently upgraded figures, with sales up 2% to Â£205m and a pretax profit of Â£7.3m. Adjusted eps was 7.5p versus 0.5p last year. Net cash at the period end was Â£34m and the results also heralded a return to the dividend list, with a maiden 1p payout. In part, much of the improvement boils down to the major restructuring, which saw FCCN sell its Nicole Farhi brand, exit its operations in Japan and close several loss-making retail stores in the US and Europe at a cost of Â£9.5m. The standout factor to these results however was the rapid growth of wholesale, which sells to independent retailers and department stores as well as e-commerce sites. I ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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