ALY – Laura Ashley – it figures

Well, well, well. I see that speciality retailer ALY (Laura Ashley) has scrapped its dividend. It issued its final report today, sending the shares down 6.1% to 8.2p. I see that Stockopedia reports its dividend yield as 17.2%, an overwhelming sign that the dividend is vulnerable.

Indeed, considering that the shares dropped “only” 6.1%, the market seemed to have been mostly expecting this development. Stockopedia classifies this company as a value trap – boy, did they get that right – and gives it a momentum score of 11. Looking at the chart, which is basically downhill all the way, I am not surprised by such a low score:

Chart-laura-ashley-holdings-2372017.png

Their sales revenue is down 3.1% on a like-for-like basis, which is bad. Their hotel revenue is down. For some reason, the directors have decided that a home furnishings and womens fashion retailer should also be in the hotel business.

I have long aired suspicions about this company. It’s a total bargepole for me, and these results only strengthen my suspicions. The directors simply cannot be trusted.

Paul Scott had this to say:

if this company had a conventional ownership structure, then I would probably buy some at the current valuation, for the speculative upside from expansion in Asia.

However, it is dominated by Malaysian shareholders & management. The problem with this, is that at some point they might simply decide that the UK listing is a waste of time & money. So the disaster scenario would be if we wake up one day, to find the company announcing its intention to de-list.

Tthe company has historically paid out extremely generous divis to all shareholders. Last time I looked, management remuneration looked reasonable too.

8.2p

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About mcturra2000

Computer programmer living in Scotland.
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