ALY – Laura Ashley – still looks odd

Looking at ADVFN, I noticed a mention of a dividend cut. Sure enough, in the prelims issued on 10.4.2015 (http://is.gd/KkGhmN) they announced that the total dividend for the year would be 2.0p, down from 3.5p last year. So ADVFN has its uses.

The RNS mentioned that they had £27.8m in cash. However, there was a purchase of a property subsequently, which drew massive investor concern. I had previously written about this in June (http://is.gd/DspE0w)

Do you want to know what I think? I think the directors are using cashflows from the retail side to bankroll a property empire in Malaysia/Singapore. The directors have past association with property development. Don’t be surprised if there is more of the same. Watch to see if they take on debt to fuel an expansion of their property portfolio. Then there will be no doubt.

The directors can go to the bank and reassure them that their income stream isn’t wholly dependent on rentals, and is therefore a safe bet. Makes sense, right?

26p

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About mcturra2000

Computer programmer living in Scotland.
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3 Responses to ALY – Laura Ashley – still looks odd

  1. Imran Awan says:

    Interesting article.

    The dividend hasn’t been cut though as in 2014 they paid a bonus dividend of 1.5p and the normal divis have always been 2p.

    I know the property purchase in Malaysia has spooked investors, I’m not thrilled by it either, but if they are expanding in Asia this should grow earnings. Lets see what the future brings, but for now I’m continuing to hold.

  2. shinygoldcar says:

    When I looked at this in the past, it seemed to me that they didn’t really have the same dividend policy as most other companies listed in the FTSE: they tended to raise and cut the dividend as they see fit. I haven’t followed them for a couple of years, but have a look at their long term record. I think the dividend goes up and down a fair amount if I remember correctly.

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