Companies: AXN    BOOT    FCCN    MKS    MRT    PEA   

'FCUK — good value relative to rivals'

In the wake of a difficult few weeks for sector blue chips Boots and Marks & Spencer, AIM broker of the year Evolution Beeson Gregory's analysts have been casting a judicious eye over the small cap retail market of late.

Unsurprisingly, this was good news for perennial sector darling French Connection, which shrugged aside fears of poor Christmas trading to report a near 30 per cent surge in profits (pre-tax and goodwill) to £38.7 million for the year to 31 January.

Despite a reportedly tough spring trading period, autumn wholesale orders are believed to be strong and the company's US business is reckoned to be improving steadily. Trading off a still relatively inexpensive prospective p/e of 15.9 times (based on forecasts of a £45 million profit this year) analyst Nick Bubb rates French Connection 'good value relative to [main rival] Ted Baker' and says add.

Trading off respective forward p/es of 7.6 and 9.7, fellow fashion business Alexon and budget clothing retailer Peacock also receive the thumbs up from Bubb, who maintains an add rating on both.

Department store/perfumery operator Merchant Retail, however, is subjected to harsher treatment with Bubb questioning the strength of some areas of business and the company's current value of £200 million. 'The shares look a little expensive,' he says. Reduce.