ref="http://www.cityam.com/company/supergroup">SUPERGROUP shares dived yesterday as a warning over the rising costs of materials spooked investors despite a healthy profit update.
The company – which owns the popular Superdry brand – has seen its shares soar since they were floated at 500p in March – raising £395m to bankroll its expansion.
It made an underlying pre-tax profit of £13.5m in the six months to 31 October. That compares with analysts’ consensus forecast of £13.2m.
SuperGroup said: “The autumn/winter collection has been well received by our customers in the UK and overseas, and our owned and franchised retail expansion is progressing as planned.”
But some analysts went cold on the company after it warned that the cost of raw materials was putting it under pressure. Its shares dropped up to 17 per cent yesterday, eventually closing 10.9 per cent lower at 1.450p.
The lack of an interim dividend was also seen by some as a disappointment. The retailer has opened four new shops and 13 concessions in the first half. Keith Bowman of Hargreaves Lansdown said: “Pre-tax profits appear to be at the high end of analyst expectations. Nonetheless, accounting issues and concerns over rising input costs – cotton prices in particular – appear to have taken the shine off the shares.”