Shares digital

Alexon (AXN) – Finals PTP: £12m (£10.5m) Divi: 9p (9p)

A 5.6% drop in underlying sales was more than offset by a strong improvement in operating margins. The sales decline was especially marked in Bay Trading. In addition the company was able to sell its loss-making menswear business albeit for £1. The company now concentrates upon two markets. Alexon Brands concentrates upon womenswear while Bay Trading serves the young fashion market.

The company is cautious about the outlook for this year realising that it cannot buck the trends caused by reduced consumer confidence. The house broker Dresdner Kleinwort is forecasting earnings of 22.1p rising to 23p next year. The broker is forecasting a maintained dividend. At 95p the PE is 4.3 and the prospective yield 9.5%, and analysts at Dresdner have slapped a 140p price target on the shares.

Shares says: Sentiment likely to be dominated by dismal outlook for consumer spending, which will be reflected in the rating.

by: John Marshall