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Supergroup - Broker share price target of 2075p

February 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.

  • Epic Code:
  • SGP
  • Price:
  • 1774p
SuperGroup has announced the acquisition of their fast growing Benelux and France franchise partner, CNC Collections. For a maximum consideration of Eu40m, of which there is Eu7m cash with the rest in shares, Supergroup is buying in a sales base of over Eu40m and a profit stream of Eu8m from the current 29 stores, which probably represents an exit PE of roughly 6x, so the deal should be very earnings enhancing. Key to the deal is that the management of CNC are being retained and will spearhead the roll out of the franchise business going forward. Singer has nudged up its eps forecast for the current year to 45.2p and 63.6p next. Arden’s forecast rises to 47.3p and 69.1p and has set a 2075p price target. A Q3 update is due as we ...

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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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