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Walker Greenbank – updates following fire at its Loughborough wallpaper factory

By Steve Moore | Thursday 7 December 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Having declined towards 120p following a profit warning last month, shares in luxury interior furnishings company Walker Greenbank (WGB) had recovered above 130p before an intra-day (12:28pm) Update re Anstey Wallpaper Company announcement…

The news is of “a minor fire” at Anstey Wallpaper, the company's Loughborough wallpaper factory, which has damaged a printing machine and “a small amount of stock”. The latter and repair are noted to be covered by the company's insurance policy, though “whilst the fire was minor, it is too early to know when the damaged printing machine will be back in production… some of the orders planned to be printed on the machine might be delayed into the new financial year. The maximum potential impact on profitability in the current financial year is expected to be less than £0.5m”.

This compares to a forecast just below £13 million pre-tax profit – and thus sees the shares only modestly lower to 130p, though we await further detail in “a further announcement as soon as possible”.

The shares are though at current levels following it being announced last month that “momentum in order intake has not been sustained and Brand sales in the UK, excluding Clarke & Clarke, have weakened significantly against management's expectations”. This followed it stated just 6 weeks earlier that “encouragingly, the Brands' order intake is growing ahead of last year and is on an improving trend in the run-up to our key autumn selling period”.

That saw me conclude that, although an attractive rating was now suggested, there looks to be an obvious lack of visibility here. The lack of confidence that can be placed in forecasts, together with continuing consumer concerns, see me currently continue to avoid.

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