News Column

Mallett Shares Drop, "High Value" Sales Required To Meet Expectations

August 28, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Shares in Mallett PLC dropped almost 14% Thursday, after the antique furniture dealer said weakness in the US led to a decline in revenue and a first-half loss, and that it doubts its results for 2014 will be an improvement on the earnings reported in 2013.

The company said its chances of meeting full-year expectations depend on whether it can make a number of "high value" sales in a market it states is currently both fragile and unpredictable.

"The board notes that an outperformance versus its budget for the second half of the financial year would now be required to maintain full year expectations. The board considers it unlikely at this stage that our full year results will represent an improvement on our underlying results for 2013," said Chairman Peter Daresbury in a statement.

Mallett shares were trading down 13.6% at 48.82 pence Thursday afternoon.

Mallett swung to a pretax loss of GBP0.7 million for the six months to June 30, from a pretax profit of GBP0.2 million in the first-half of 2013.

"The results highlight the fickle market that we trade in: the US experienced very strong revenue growth in 2013, which has been followed by a slower six month period with little obvious explanation," said Daresbury.

First-half revenue fell to GBP4.4 million, down from GBP6.6 million a year earlier, hit by weaker US sales, which it said more than offset a 6% increase in UK sales.

The company said a significant proportion of its business is driven by the sale of a small number of very expensive pieces, which can either boost or hit its profit and revenue.

"Last year a number of high value pieces were sold in the first half of the year. Unfortunately this has not been matched in the first half of 2014. However, there are a number of such pieces being reviewed by our clients which we hope will convert to sales in the second half of the year," Daresbury added.

The company did not declare an interim dividend, having paid out a special dividend of 12.7 pence per share in June, after returning GBP1.75 million in sale proceeds from the disposal of its freehold property in Clapham, south London, in cash to shareholders.

Mallett launched its new website earlier in the year, and said it plans to invest further in marketing later in the second-half.

"We plan to launch a full online marketing campaign after the summer and expect the website to show an increased contribution to sales towards the end of the year," it said.

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Source: Alliance News

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