Updates

Retail Decisions - Acquires leading Australian gift card operator

January 2006

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.

Retail Decisions has acquired E Com Industries, the largest stored value (pre-paid) gift card operator in Australia, for £12.9m funded largely by new borrowings. Stored value cards are payment cards where the consumer can spend a pre-determined amount that has previously been loaded onto the card (pre-paid cards). Stored value cards is a fast growing area in the payments market and E Com already operates 30 gift card schemes for a variety of blue chip retailers, giving it half the market for gift vouchers in Australia. E Com has grown rapidly since inception, with sales of £2.5m in the year to 30 June, an increase of 160%. At that level, it made a marginal operating profit of £40,000 but gross margins are ...

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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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