Traditionally, the summer is a slow time for business. Consumers are either in the park, at the seaside or in cheap resorts abroad; CEOs take their extended breaks from the strain of corporate life; those in charge of procurement departments postpone their buying until the autumn; and every salesperson in the country discovers the joys of long ‘networking’ lunches.

But while the majority of firms are forced to ride out the long summer slumber, a handful burst into life, generating the vast majority of their revenues during the supposed downtime.

Playing it cool

Typically generating two-thirds of its revenues, not to mention 85 per cent of profits, in the six months to September, ice cream manufacturer Richmond Foods is the archetypal summer stock. The reasoning is simple: as the weather gets hotter, people eat more ice cream. What marks Richmond out as a business of note, however, is that it has managed the rather neat trick of turning a profit during the winter months too.

May’s interims were slightly down on last year – sales fell 1.6 per cent £50.8 million and pre-tax profits slid £200,000 to £1.9 million – but these figures were held back by a restructuring of the supply chain and a recent acquisition. With these two factors stripped out, profits actually improved by £800,000.

The group’s recently launched low-fat (Skinny Cow) range is expected to make a major impact this summer and a strong second-half performance is predicted. Broker Investec anticipates a nine per cent rise in full year profits to £15.2 million, affording earnings of 46.9p a share. This places the shares on a prospective p/e of 13.6 – by no means cheap for the sector but a fair price to pay for a quality business.

For those seeking something a little more speculative, luxury ice cream manufacturer Hill Station should appeal. The AIM-listed business is valued at just over £5 million and is widely tipped for a bright future. Its last set of results showed sales of £682,000 and a loss of £162,000. But with £1.4 million in the bank from its float fundraising, if it gets its product mix and expansion plans right, it could thrive.

Betting on the summer

Considering that it has just announced a disappointing first-half performance, you would be forgiven for thinking that now is hardly the time to buy Parkdean Holidays. But the recent slump in the share price was overcooked and the caravan park operator is worth more than a cursory glance.

The share price fall occurred after its first half results showed a 71 per cent rise in losses to £9.6 million. More worryingly, the company confirmed that like-for-like bookings at its parks in England, Scotland and Wales continue to run 4.1 per cent behind 2004 levels.

In spite of this, chairman Graham Wilson expects a strong late summer performance and predicts full year sales will ‘at least match 2004 levels.’ He also notes that measures have been put in place to avoid similar problems next year.

House broker Charles Stanley concurs and forecasts an £11.5 million full year profit, significantly ahead of the £9 million achieved in 2004. This places the 205p shares (market cap of £102.05 million) on a prospective p/e of 13.2 times, and they are anticipated to offer a 3.4 per cent dividend yield too. Debt stands at £81.8 million, but not only is the interest covered 3.1 times, but a recent re-evaluation of its property assets (glorious stretches of land along the UK’s coastline) puts its net asset value at circa £124.5 million (250p per share).

Retail winners

Over in the retail sector, few companies are as dependent on favourable weather conditions as those operating garden centres.

The likes of Wyevale and AIM-listed Dobbies annually wish for warm and dry conditions throughout the spring, leading into a long, sunny – but not too hot – summer, as this keeps the cash tills ringing. So far, however, 2005 has failed to live up to script. Indeed, in its interim announcement to April, Dobbies confirmed that, while sales are running ahead of last year, growth slowed throughout what should be the company’s busiest trading period.

Analysts still expect a respectable second-half performance from Dobbies, but with the shares currently trading close to a three-year high, now looks a sensible time to take profits.

Wyevale is growing at a faster rate (broker Numis estimates that profits before goodwill and exceptionals will rise around 16 per cent to £26 million this year) and thus looks the better long-term bet for investors, although its shares also occupy their highest levels in three years.

Last, but by no means least, bookstore operator Ottakar’s is worthy of consideration. Poor Christmas trading weighed heavily on the share price of this once high-flying high street retailer, although sales and profits both continued to rise during the period.

For Ottakar’s, this summer’s big event will be the release of the sixth Harry Potter book in mid-July. The launch should boost both sales and customer footfall over the summer months.

For the year to June, broker Evolution Securities expects a £8.3 million profit from £185.9 million of sales; this places the shares on a prospective p/e of 11.2 times forecast earnings and marks them out as good value.