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In view of the slashing of the 2024 outlook one month ago, expectations for the H1 figures were pretty low.
Regarding the attractive level of the share price, a share buyback programme many come under the spotlight
Efforts to cut costs are in progress and will safeguard profitability
The limited visibility in the US and China is persisting and continues to feed the weak sentiment on the stock
The FY 2025 consensus is likely to be revised downward
Companies: Remy Cointreau (RCO:EPA)Remy Cointreau SA (RCO:PAR)
The weaker than expected performance in China and the worsening situation in the US capsized the Cointreau ship.
While a profit warning had been expected, its magnitude caught everyone off guard
The historical premium for Remy is now out of the picture and this might be an attractive entry point for the stock
A miss on the street’s expectations and a profit warning for Remy Cointreau. The situation is worse than we had expected.
For the Q2 results, all eyes are likely to be on the company’s outlook. The FY 2024 guidance is unlikely to be reached. However, the consensus has already priced this in. The historical premium for Remy is now out of the picture and this might be an enticing entry point for the stock.
Although this Q1 was hardly surprising, the confirmation of the guidance brings warmth to the heart, especially with the confirmation of a sharp rebound in the US from Q3. The positive US value depletions in June and China back on track reinforce our belief that the FY guidance is attainable.
Despite the new impressive results, it is the outlook for the US market that dominates the scene, reflected by a decrease of approximately -5.0% in the stock variation. The first-quarter revenue is expected to decline by 30% to 40%. Consumers are not hesitating to switch to less premium products, as Tequila continues to encroach upon the market share of cognac.
In the face of normalization and a slowdown in consumption in the United States, Cognac experienced lower-than-anticipated trading during Q4 23. The market’s overreaction is attributed to the FY 24 outlook.
The Q3 numbers were better than expected but the US is once again worrying. Last year’s exceptional levels justify a slowdown, but how far down do we really need to go before we become concerned?
It seems that, when one’s valuation is at a premium to peers, the slightest slip-up can be very costly. The market sanctions cautious statements that surprise no one but themselves.
The Q1 beat with impressive +27% organic sales growth and a confident tone regarding China are the two main positives. The valuation now seems more interesting, with 37× 2023 P/E, which looks low if we compare it with its Italian peer Campari and given the near-term risk/reward which is skewing positively.
Companies: Remy Cointreau SA (RCO:PAR)Remy Cointreau SA (0MGU:LON)
A Q4 in line and the reiteration of the FY22 coupled with a confident tone for Q1 FY23 have reassured, although the situation in China remains a concern.
Another quarter, another beat, but no change in the FY21 guidance and a CFO comfortable with the current FY21 consensus expectations. However, the publication set the tone for the spirits report, with growth momentum definitely still favourable. We continue to prefer more affordable peers like Diageo and Pernod Ricard.
An exceptional H1 EBIT, with strong beats everywhere, which, for a large part, will drive the FY21-22 EBIT growth. A strong upgrade is expected for consensus’ full-year expectations, although H2 is expected to slow. The performance can justify the rich valuation, but we see more upside for peers.
“Unsurprisingly” strong Q2 sales figures driven by still-strong momentum in the US and China. The guidance was raised qualitatively, but still lacks clarity.
No upgrade in the FY21/22 guidance despite Q1 sales beat and what appears to be a better-than-expected operating performance. The results set a positive tone for the sector, but for Remy Cointreau we believe that the stock is definitely too expensive.
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Companies: Kooth PLC (KOO:LON)Wynnstay Group plc (WYN:LON)
Britvic reported robust FY23 results despite the weaker consumer environment, reflecting the resilience of its brand portfolio. Price/mix offset limited volume declines resulting in revenue growth of 6.6%, despite unfavourable summer weather and tougher comparators. Inflationary pressures were mitigated through pricing actions and cost discipline, as adjusted EBIT grew 6% at a margin of 12.5%. Investment in its existing brand portfolio and the recent addition of two bolt-on acquisitions in high
Companies: Britvic plc
Companies: Greencore Group Plc
Greggs continues to generate premium sales growth through a combination of volume, including market share gains as distribution increases, and price growth. The strength of underlying trading in Q323 is highlighted by management’s confirmation of consensus FY23 PBT expectations despite the addition of new costs for expanding the company’s delivery offer to a second platform and a slight delay in some store openings from the end of the year into FY24.
Companies: Greggs plc
FY23 trading has continued according to the early August update, demonstrating the benefit of two unrelated activities at Carr’s Group: the Engineering division’s strength countering the weakness seen in the Speciality Agriculture business. Both have underlying longer-term growth attractions to drive earnings, along with the recovery potential in the agriculture end-markets.
Companies: Carr's Group PLC
Companies: Wynnstay Group plc
Companies: Cake Box Holdings Plc
There has been some seasonality that has affected H1 crops and production performance, but production has rebounded strongly in July and August, the CPO price has declined slower than we anticipated, and fertiliser costs have fallen. Consequently, we leave our forecasts unchanged. It’s been an exceptional couple of years for profitability and FCF generation for MP Evans; this cashflow is being put to good use and is funding an ongoing programme of share buy-backs and acquisitions, with two annou
Companies: M.P. Evans Group PLC
Companies: MPE ING EXR
Greggs has entered the second full financial year of its five-year growth plan having exceeded our initial FY22 revenue estimates, helped by elevated external inflationary pressures, and with profit in line with management’s expectations. Despite the more challenging external environment, Greggs made good progress with the majority of its revenue growth initiatives in FY22. Following the expected normalisation of the cost base, which hampered profit growth in FY22, we forecast more consistent pr
Carr’s Group has announced a fully refreshed executive team, none having been in-situ at the start of 2023. This will enable the executives to have an uninhibited view of the operations, enabling the development and implementation of a strategy reflecting the different opportunities and challenges facing the Engineering and Speciality Agriculture divisions.
Companies: CLA LPI VAST CMET SRB CEY TGR
Much of the UK’s privatisation programme took place between the early 1980s and the mid-1990s: subsequent sales have been few. Undoubtedly, privatisation attracted many private investors to the market, many for the first time.
Companies: RE/ SCE ARBB SIXH AGY RECI CLIG GDR TRX ARIX AVO DNL PCA NSF RMII PHP STX SHED VTA BUR PIN PXC
Hardman & Co
30th November 2023
Status of this Note and Disclaimer
This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment obj
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