Fashion newcomer In The Style Group PLC (AIM:ITS, FRA:8DH) was a top faller on Friday morning as it reported strong growth in revenue but warned that profit will be hit by higher freight costs and more people returning items.
The online womenswear specialist said it had seen the anticipated shift in demand towards occasionwear, but this typically carries a higher rate of returns than the leisurewear categories that had dominated sales during the previous year.
On top of that, progress on growing sales of its “more inclusive” size ranges also resulted in an increase in the rate of returns.
It also flagged that “increased freight costs and disruption to the timing of shipments are expected to remain for at least the remainder of the current financial year which, in combination with the increased returns rate in the period, will impact the group’s profitability”.
Analysts at AJ Bell said returns “could have been prevented or reduced if it has stricter rules around returns”, with occasionwear likely to be suffering from “the classic trick of going to a party with the tags still on a dress and returning it the next day”.
8.47am: Touchstone Exploration and Microsaic Systems make early strides
Touchstone Exploration Inc (AIM:TXP, TSX:TXP, OTC:PBEGF, FRA:PNW1) shares were making early strides on Friday, gushing 24% higher to 108p after reporting that drill results from the Royston-1 exploration well on the Ortoire block onshore Trinidad significantly exceeded expectations.
The team discovered 393 gross feet of hydrocarbon pay in the Herrera formation – almost double pre-drill estimates.
Mud and wireline logs pointed to accumulations in the Lower Cruse and Karamat sections too.
Chief operating officer James Shipka said he believed the discovery was natural gas rather than oil, but added: “We will wait for testing results to confirm [this].”
Building on a separate distribution agreement agreed in the People’s Republic earlier this year, the AIM-listed company said Jiangsu Henzhihe Technologies (HZH) will act as manufacturer, integrator, and service centre in support of original equipment manufacturing (OEM) deals for Microsaic’s mass spectrometry (MS) hospital diagnostic monitoring equipment.
The UK company said production in China of the MS hospital equipment is expected to begin before the end of this year to support local production and service support, which are pre-requisites to securing a medical license.
“The agreement establishes a local presence for Microsaic, accelerating the company’s growth opportunity in China,” it said, eyeing an addressable market of 33,000 hospitals in the country.