Ashley (Laura) Holdings PLC (ALY)

[WickedLester]

Has anybody ever looked at these? I was taking a look today and think they may prove an interesting contrarian play on an eventual recovery in consumer spending/Far East expansion.

The market cap is now around £30m and they are trading at a reasonable discount to NTA. In the first half they made a post tax profit of £3.4m (I imagine the period to the end of December is seasonally stronger so I wouldn't bet on the second half being as good as the first). But if they remain profitable in the second half then the multiple is reasonable.

The thing that makes them interesting to me is the very low psr. Annual sales are around £250-£300m and just a few years ago they were making proft before tax of over £20m per year. The other thing that makes them interesting is the balance sheet which has around £40m of freehold property including a large office building in Singapore which they claim to have bought as a hub for Far Eastern expansion.

Debt is a bit high but this results mainly from paying £30m for the singaporean property.

The main risks that I see are that the brand is in terminal decline and that there is a 60% shareholder from Singapore who may choose to delist them or otherwise disenfranchise minority holders although he has shown no inclination of doing it for many years.

I wonder if they haven't been oversold with all the pessimism surrounding retail in the UK?

Anyone have an opinion?

Lester

[CommissarJones]

Interesting point about the balance sheet, and I could see that as the basis for potentially buying into ALY as an asset-based value play. But as a consumer spending/Far East play, I would think there must be far better prospects than this one. IMV, it's a tinpot with a tired brand and a chequered financial history.

Your point about the brand being in decline is well taken, and as a consumer-facing company, maintaining a certain degree of public profile is important for ALY. However, it really does not strike me as a company with a great deal in the way of resources to support that brand. Does ALY have any kind of moat to help deter competitors?

Frankly, I have to wonder whether ALY has much reason to exist other than sustaining the fortunes of that 60% shareholder. In its most recent financial year, the company had a net cash inflow from operations of £16.3 million and paid out £14.5 million as dividends.

[WickedLester]

Frankly, I have to wonder whether ALY has much reason to exist other than sustaining the fortunes of that 60% shareholder. In its most recent financial year, the company had a net cash inflow from operations of £16.3 million and paid out £14.5 million as dividends.

Isn't this kind of highlighting why it might be an attractive proposition? I mean if the company can return to generating this sort of cash and paying it out wouldn't the company look dirt cheap at £30m

There is some speculation that the Singaporean shareholder is letting things decline temporarily on purpose as he is in the process of going through a messy divorce and is trying to minimise his assets (I think he has substantial assets in other areas too).

Anyway I bought a few (not many) on this basis.

[CommissarJones]

The other thing that makes them interesting is the balance sheet which has around £40m of freehold property including a large office building in Singapore which they claim to have bought as a hub for Far Eastern expansion.

The company has agreed to sell the Singapore property, which may be connected to the stock's 16% rise today. So well timed on the share purchase!

ALY also released its finals.

[WickedLester]

The company has agreed to sell the Singapore property, which may be connected to the stock's 16% rise today. So well timed on the share purchase!

ALY also released its finals.

Thanks, I decided to sell and take a quick 25%, retail's still tough and the true intentions of the Asian shareholder remain a bit of a mystery.