N Brown – a candidate for the Modified price earnings ratio portfolio

PUBLISHED: May 04 2017 @ 09:57 | Comments (0) |

N Brown (LSE:BWNG) used to be an old-fashioned home catalogue retailer. Now 69% of sales come from online, most of those through smartphones. It sells clothing, usefully filling niches for customers in the size 20+ and the aged over 50 categories.

Of course, with 4.3 million registered customers there are opportunities to sell other things such as homewares and electronic items.

It share price has fallen from £5.93 in 2014 to £2.68 today, giving a market capitalisation of £759m.

Profits are not what they used to be, with a steady decline in earnings per share from around 29p in 2012 to only 15.67p in the year to 4 March 2017. If we are less harsh and exclude the negative exceptional items then EPS last year was a more respectable 22.74p, a bit below the ten year average – see table.

Pence per share	Earnings (basic)	Earnings (adjusted)	Dividends
2017	15.67	22.74	14.23
2016	19.23	24.02	14.23
2015	18.15	24.61	14.23
2014	27.09	27.74	14.23
2013	28.51	28.04	13.68
2012	29.28	28.84	13.03
2011	26.04	26.88	12.41
2010	22.83	24.77	10.79
2009	22.88	21.96	9.19
2008	21.16	20.27	9.06

Dividend yield is 14.23p/268p = 5.3%. I’ll look at the threat level to that high dividend yield in another Newsletter.

Average earnings per share “basic”: 23.1p

Cyclically adjusted price earnings ratio “basic”: 268p/23.1p = 11.6

Average earnings per share “adjusted”: 25p………………………………………….To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1

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