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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 (RCO:EPA)Remy Cointreau SA (RCO:PAR)
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.
Our view remains unchanged: the results are good, the outlook does not look bad either but the stock is now too expensive and therefore we see limited upside for the moment.
A slight miss on the Q4 top line, but full-year earnings, with the group expecting about 10% organic growth in EBIT, as well as its guidance of a strong start to FY22, remain supportive, although we believe these are already priced in.
Strong Q3 revenue beat driven by the US and Mainland China. The group’s confidence about its outlook and the Chinese New Year should slightly liven up the stock somewhat in short term due to the recent weakness, although we believe that most of the positives are already priced in.
Companies: Remy Cointreau SA
Strong momentum in the US and Mainland China has led to upgraded H1 EBIT guidance. We, however, struggle to justify the current very rich valuation.
Better-than-expected first-quarter sales, which exceeded expectations. Coupled with unchanged expectations for the second quarter, the group has positively revised its H1 expectations, while the US and China are expected to push the second half of the year higher.
FY20 Remy Cointreau’s operating profit beat our expectations (€215.1m vs. €208m), while the company also raised its Q1 FY21 guidance. 2021 will still be a challenging year, with a strong drop expected in H1, but the mid- to long-term outlook has brightened.
Fine FY20 sales, as they dropped in line with the consensus, but Q1 FY21 should ultimately be worse than expected and Q2 should show a recovery (but still negative growth). The H1 operating profit should therefore be under pressure. Remy is attractive in the mid-term, but the lack of diversification and high valuation means that we should continue to keep away from the stock at this stage.
The group reported an even worse than expected set of Q3 results, leading to the decision to hold off on the previous annual and midterm objectives. There was significant weakness in cognac and the situation was no better for Liqueurs & Spirits. China remains the negative hot spot, and we don’t see any improvement in the short-term.
Remy reported H1 EBIT which missed the already-lowered consensus expectations (€138.3m vs. €144.6m expected), mainly due to the higher than expected holding company’s costs. External factors (HK protests and unusual replenishment in the US) have penalised the group, and we are now convinced that it should report less bright FY results than last year. Improvements are expected in H2, and particularly in Q4 as Q3 should remain highly linked to the volatile macro environment.
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Companies: Hotel Chocolat Group Plc
A reassuring end to the year, with a FY22 beat. The cautious tone for FY23 had been expected given the elevated levels for 2022, but the mid-term (FY23-25) guidance was reiterated. In our view, Diageo remains a core holding given its superior execution and capital allocation.
Companies: Diageo plc
Nichols has reported a good set of interims, successfully managing sector headwinds. This was led by further UK market share gains and significantly, OoH revenue back above pre-covid levels. Timing and shipment challenges hindered International progress but momentum exiting Q2 has been good. The OoH strategic review is progressing well. A keen focus on value over volume and mitigating actions means no change to current year expectations. However, prudence around industry challenges influence us
Companies: Nichols plc
Singer Capital Markets
Greggs’ (GRG) strong H122 results and trading to July demonstrate the resilience of its value-based product offering to customers in more challenging macroeconomic conditions and it is making good progress in generating incremental revenue from its new growth initiatives. Management’s reiteration of profit expectations for FY22 is welcome in the face of increasing input cost pressures. The near-term P/E multiple of 18.3x is only in line with its long-run average multiple despite the aspiration t
Companies: Greggs plc
This morning's announcement that DKL has completed an oversubscribed final drawdown at an improved rate reflects the growing scale and stature of the business at a time when rates globally are rising dramatically. It follows on from the company's half year update ten days ago which showed how pricing has strengthened in its palm oil business, and also referenced significant milestones for the cashew business stream, a key new driver for profitability. Drawdown proceeds will be used to refinance
Companies: Dekel Agri-Vision Plc
Companies: Cranswick plc
Companies: A.G. BARR p.l.c.
Carr’s Group’s trading update for the 22 weeks ending 30 July 2022 notes that the overall trading performance for FY22 is in line with board expectations so we leave our estimates unchanged. The board states that the strategic review announced in December 2021 is nearing completion and it expects to make a separate announcement soon.
Companies: Carr's Group PLC
Kendrick Resources (KEN.L), a mineral exploration and development company, with projects in Scandinavia has joined the Main Market (standard) raising £3.25m. With effect from Admission, Kendrick will have vanadium exploration projects in Finland, and Sweden with an option over 3 further nickel projects in Norway under the EMX Option Agreement. The Projects have three defined Mineral Resources.
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GS Chain, a company established
Companies: WSG CVSG FAB NSCI OGN PHE REVB THR
Dish of the day
LifeSafe Holdings (LIFS.L) joins AIM. The fire safety technology business with innovative fire safety products, has developed what the Directors believe to be market disrupting, eco-friendly fire safety protection products to both protect (via fire extinguishers) and detect (via carbon monoxide, smoke and heat alarms) fires. The Company raised £3m on Admission. Market Cap approximately £16.6m.
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Companies: TRAK AO/ D4T4 DIS INL SAV
Mondelez International has been looking to strengthen its position in the snacking category and the recent $2.9 billion acquisition of Clif Bar is a key step in the process. The U.S manufacturer of nutritious energy bars along with organic ingredients will be a valuable addition to Mondelez’s portfolio. The company managed to deliver a strong result and an all-around beat with strong bottom and top-line performance growth in overall categories and regions. The biscuit and chocolate business of t
Companies: MONDELEZ INTERNATIONAL INC-A (MDLZ:NYSE)Mondelez International, Inc. Class A (MDLZ:NAS)