After cycling over 180km at the weekend maybe i shouldn’t be surprised that I felt like an old man when I got out of bed this morning. At 35 I’m certainly not over the hill and I pride myself on being pretty fit for my age. That said judging by the way i grabbed my back and cursed myself for leaving my slipper downstairs as I rolled out of bed this morning I guess my age is starting to creep up on me.
Recovering from long rides on the bike or the odd 10km run takes me noticeably longer than it used to do. I’ve got a couple of niggling injuries that seem determined to stick with me forever, flaring up every few weeks to say hi. I’ve gradually resigned myself to managing them rather than curing them.
However I guess I can take solace from the fact that I’m not the only one….we’re all getting older. There’s an interesting article in the FT today about how one of the few sectors not only surviving, but flourishing on the high street is the shops selling mobility scooters, hearing aids and clothing targeted towards elderly consumers.
The article mentioned the rapid expansion that one firm (N Brown Group PLC – BWNG.L) that caters for this market. Their number one selling is apparently large, elasticated trousers for women. A quick look at their YTD share performance reveals that maybe they sold a shed load of elasticated trousers…
In the UK the average age is expected to rise from 39.7m in 2012 to 42.8 by 2037 according to the Office for National Statistics. While this may not seem like a huge rise on the face of it there are some chunky moves driving these numbers. For example the number of people aged 80 or over is expected to double in the next 20 years. Whichever way you slice it, the ‘older generation’ are growing in numbers which presents a company such as N Brown with a growing market.
A Closer Look
Revenue appears to have steadily increased over the last 5 years if not spectacularly. The annual reports state that 61% of their 2013 revenue came from customers over 50. The P/E is a little high at 18.4% for my liking, though not out of the ball park for a retailer with growth potential. Gearing has been reduced over the last couple of years to 42% and funding is in place until the end of 2016.
The company currently has a dividend yield of 2.67% which on it’s own is not spectacular, however they’ve been consistently growing their dividend per share over the last 5 years. The 5 year dividend growth rate is 8.59%. Dividend cover seems to be reasonable at just over x2 times.
All in all from some brief research this morning they look like a well run company making reassuringly steady progress with most of the key metrics going in the right direction. The main thing I like is that they have a target market that is expected to grow significantly over the mid to long term. This is definitely one to add to the watch list and do some more research on.
That said I think i’ll hold off ordering any elasticated trouser for a few more years yet…