Dewhirst Group Plc manufactures and distributes clothing and toiletries. Operations are carried out in the United Kingdom, Malaysia, Morocco and Indonesia. Manufacture of clothing accounted for 91% of revenues for the year ended 14th Jan 2000 and toiletries accounted for 9%.
Dewhirst Group Plc operates in the Diversified Apparel Mfrs. sub-industry, which is a sub sector of the Apparel & Textiles industry. They supply clothing to companies such as Marks & Spencer’s and also police uniform. This analysis compares Dewhirst Group Plc with, Worthington Group Plc (2000 sales: £26.47 million of which 100% was Textile Products). Worthington Group Plc manufactures, imports and distributes sewing threads, narrow textile fabrics, pocketing, waistbands, specialist linings, buttons, shoulder pads, interlinings, elastics and other trimmings and accessories. The clothing, home furnishing and industrial markets uses these products. All of the group’s subsidiary undertakings are registered and operates in the United Kingdom.
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Dewhirst Group Plc reported sales of £380.40 million for the year ending January of 2000. This represents a very small increase of 0.06% versus 1999, when the company’s sales were £380.15 million. Sales at Dewhirst Group Plc have increased during each of the previous five years (and since 1994, sales have increased a total of 54%).
Recent Sales at Dewhirst Group Plc
247 279 316 364 380 380
1994 1995 1996 1997 1998 1999
(Figures in Millions of Pounds Sterling)
Just over half of the company’s 1999 sales were in its home market of the United Kingdom: in 1999, this region’s sales were £198.13 million, which is equivalent to 52.1% of total sales. In 1999, sales in Morocco were up at a rate that was much higher than the company as a whole: in this region, sales increased 35.3% to £88.76 million. Dewhirst Group Plc also experienced significant increases in sales in Malaysia (up 17.4% to £30.89 million). Although the company’s overall sales increased, sales were not up in all regions of the world: sales in the company’s home market of the United Kingdom were down 16.4% (to £198.13 million) and sales in Rest of Europe fell 18.2% (to £29.10 million) and sales in Rest of World fell 19.4% (to £1.42 million).
Dewhirst Group Plc currently has 14,749 employees. With sales of £380.40 million, this equates to sales of £25, 791 per employee. This is lower than the Worthington Group Plc whose sales per employee equated to £29 277.
During the year ended 31st March 2000, sales at Worthington Group Plc were £26.466. This is a decrease of 41.2% from 1999, when the company’s sales were £45.00 million. Note that this company discontinued some operations during 2000, which could influence the sales figures. The sales level in 2000 was fairly close to the level five years ago: in 1995, Worthington Group Plc had sales of £26.36 million.
Recent Sales at Worthington Group Plc
26 27 30 39 45 26
1995 1996 1997 1998 1999 2000
(Figures in Millions of Pounds Sterling)
Sales Comparisons (Most Recent Fiscal Year)
Company YearEnded Sales(£mlns) SalesGrowth Sales/Emp. (£) Largest Region
Dewhirst Group Plc Jan 2000 380.40 0.1% 25, 791 The United Kingdom (52.1%)
Worthington Group Plc Mar 2000 26.47 -41.2% 29, 277 The United Kingdom
Recent Stock Performance
In recent years, this stock has performed terribly. In 1999, the stock traded as high as 267.00 p, versus 61.50p on 14/1/00. (In 1999, the stock retreated significantly from its high, and by the end of the year was at £0.78).
For the 52 weeks ending 14/1/00, the stock of this company was down 21.2% to 61.50p. The earnings per share of 10.13p are less than what the company achieved during the last fiscal year of the company, which ended in January of 1999, when the company reported earnings of 12.11 p per share. Earnings per share fell 16.4% in 2000 from 1999.
This company is currently trading at 0.19 times sales. Worthington Group Plc price to sales ratio is currently 0.56 times their annual sales. Dewhirst Group Plc is trading at 0.69 times book value. Since the price to book ratio is less than 1, this means that theoretically, the net value of the assets is greater than the value of a company as a going concern.
In recent years, Worthington Group Plc stock has performed terribly. In fiscal year 1993, the stock traded as high as 46.41 p, versus 26p on 31/3/00. (In 1993, the stock retreated significantly from its high, and by the end of the year was at £0.22).
For the 52 weeks ending 31/3/00, the stock of this company was to 26p. The company has experienced losses on earnings per share achieved during the last fiscal year of the company, when the company reported earnings totalling a loss of 15.60 p per share.
Summary of company valuations
Company Date P/E Price/Book Price/Sales
Dewhirst Group Plc 12/19/00 4.9 0.69 0.19
Worthington Group Plc 12/27/00 N/A 2.16 0.56
During the 12 months ending 14/1/00, Dewhirst Group Plc paid dividends totalling 4.00 p per share. Since the stock is currently trading at 61.50 p, this implies a dividend yield of 6.5%. This company’s dividend yield is higher than the other comparable company Worthington who has paid no dividends during the last 12 months. The company also reported losses during the previous 12 months.
During the same 12 month period ended 14/1/00, Dewhirst reported earnings of 10.13p per share. Thus, the company paid 53.6% of its profits as dividends.
On the £380.40 million in sales reported by the company in the year ended 14th Jan 2000, the cost of goods sold totalled £325.48 million, or 85.6% of sales (i.e., the gross profit was 14.4% of sales). This gross profit margin is slightly lower than the company achieved in 1999, when cost of goods sold totalled 84.9% of sales. The gross margin in 2000 was the lowest of the previous five years (in 1998, the gross margin had been as high as 18.3%).
On the £52.298 million in turnover reported by Worthington in 2000, (including the discontinued operations) the cost of goods sold totalled £38 740 million, or 74.1% of sales (i.e., the gross profit was 25.9% of sales). This gross profit margin is better than the company achieved in 1999, when cost of goods sold totalled 86.9% of sales.
Dewhirst Group Plc’s 2000 gross profit margin of 14.4% was lower than Worthington Group Plc whose gross profit margin was 25.9%. The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) or operating profit were £18.67 million, or 4.9% of sales. This EBITDA to sales ratio is slightly less with what the company achieved in 1999, when the EBITDA ratio was 6.3% of sales. Worthington’s earnings before interest, taxes, depreciation and amortization (EBITDA) are considerably lower than Dewhirst totalling only -£1, 730, or -3.3% of sales. This EBITDA margin is better than the company achieved in 1999, when the EBITDA margin was equal to –12.6% of sales.
Company Year Gross ProfitMargin EBITDAMargin Net ProfitMargin
Dewhirst Group Plc 2000 14.4% 4.9% 3.4%
Worthington Group Plc 1999 25.9% -3.3% -26.7%
Dewhirst Group Plc 2000 15.1% 6.3% 4.1%
Worthington Group Plc 1999 13.1% -12.6% -16.0%
As of January 2000, the value of the company’s inventory totalled £69.97 million. Since the cost of goods sold was £325.48 million for the year, the company had 81 days of inventory on hand (another way to look at this is to say that the company turned over its inventory 4.5 times per year). This is an increase in days in inventory from January 1999, when the company had £66.07 million, which was only 77 days of sales in inventory.
The 81 days in inventory is lower than Worthington Group Plc, of which As of March 2000, the value of the company’s inventory totalled £4.87 million.
Since the cost of goods sold was £38.74 million for the year, the company had 97 days of inventory on hand (3.8 times per year). In terms of inventory turnover, this is a significant improvement over March 1999, when the company’s inventory was £10.02 million, equivalent to 112 days in inventory.
The company’s long-term debt was £51,000.00 and total liabilities (i.e., all monies owed) were £88.86 million. The long-term debt to equity ratio of the company is very low, at only 0.00.
As of January 2000, the accounts receivable for the company were £31.69 million, which is equivalent to 30 days of sales. This is slightly higher than at the end of 1999, when Dewhirst Group Plc had 21 days of sales in accounts receivable.
The 30 days of accounts receivable at Dewhirst Group Plc are lower than Worthington, as Worthington Group Plc had 80 days outstanding at the end of the fiscal year 2000. At the end of the financial year, Worthington Group Plc had negative working capital, as current liabilities were £19.59 million while total current assets were only £16.296 million. The fact that the company has negative working capital could indicate that the company will have problems in expanding.
However, negative working capital in and of itself is not necessarily bad and could indicate that the company is very efficient at turning over inventory, or that the company has large financial subsidiaries. As of March 2000, the company’s long-term debt was £734,000.00 and total liabilities (i.e., all monies owed) were £20.32 million. The long-term debt to equity ratio of the company is 0.11. This is significantly lower than the long-term debt to equity ratio as of March 1999, when the long-term debt to equity ratio stood at 0.88.
Company Year LT Debt/Equity DaysAR DaysInv.
Dewhirst Group Plc 2000 0.00 30 81
Worthington Group Plc 2000 0.11 80 97
British and European designers have traditionally dominated the U.K’s fashion market, but due to the label recognition of US manufacturers, it has become increasingly easy for American designers to enter the market. American brand identity is a major contributor to the success of US companies in this market.
U.K. apparel industry sales have grown on average 17% each year since 1990, and are now valued at almost $40 billion. At 25% growth, the specialized women’s wear sector shows the highest increase in sales over the same period. Consumer spending on clothing as a proportion of disposable income has dropped from 7.5% in 1986 to 5.9% in 1997, competing with other consumer goods and services, such as computers, education, entertainment, and leisure pursuits.
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