Shares in French Connection Group PLC surged Wednesday as the struggling retailer said it expects a marked improvement on its losses for the financial year ended January 31. French Connection relies on a better-than-expected improvement in sales and margin in the UK and in Europe over the Christmas period to get by.
In a trading update ahead of the release of its full-year results on March 12, French Connection revealed it expects to report a full-year loss before tax and exceptional costs of 4.7 million pounds. This comes significantly ahead the 7.2 million pounds loss it reported a year earlier.
French Connection said retail sales and margin in the UK and Europe in the December to January period, were both better-than-expected. It also said the UK wholesale forward order book is strong and shipments have been ahead of last year.
On the wake of the news, shares in French Connection were up 16.3 percent at 41.86 pence per share Wednesday afternoon. Shares closed up 19 percent after rallying as much as 25 percent.
The retailer will close the year debt-free, with over 27 million in cash, "supported by a tight control on working capital".