UK - Bright future on the cards for disability retailer

"Old people are big business," says Penny Share Focus. Today, a fifth of the UK is over 60; by 2050, this age group will have swollen to a third of the population. Meanwhile, the number of people whose mobility is impaired has reached 8.5 million - one in four households now contain a person who is considered to be disabled in some way - and is increasing "at quite a pace". And not everyone who needs help getting around wants to wait for NHS-subsidised age and disability equipment.

All this is excellent news for age and disability equipment retailer Bright Futures Group. It is a relative newcomer to this £300m a year sector, but it has already achieved UK market-leader status with 26 nationwide stores trading under the Scootermart Mobility Centre name; 20 of its stores are operated by franchisees, and it owns the rest. The stores stock over 800 items, ranging from Battery scooters to lifting chairs, and also handle the installation of stair lifts and similar aids. Bright Futures also operates a profitable and "market-dominant" website for the disabled. This advertising-led business produces a magazine and catalogue for its members, as well as developing e-learning software for companies with disabled customers.

The company plans to have 30 of its own stores by 2006. This is "some going", but management "looks up to the job". It has already identified the next six store locations, all of which should be up and running by June 2004. Expansion should also allow the group to streamline its operations, control stock more efficiently and bolster its purchasing muscle, thus "significantly reducing" overheads. Last year, Bright Futures lost £2.8m on sales of just £2m, but this year it should break-even as sales more than double. Analysts have pencilled in earnings of half a million and £9.5m of sales for 2005, with sales and profits tipped to rise by 50% and 100% respectively the year after. Note that the group is capitalised at £3m, but has net assets worth £3.65m, "so taking an early stage investment in this niche retailer is not as speculative as you might assume". The shares look "too cheap" at three times 2006 earnings per share estimates, and "could double within the next year". Buy

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