Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on PARMALAT SPA. We currently have 7 research reports from 1 professional analysts.
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Minority shareholders will try to squeeze more out of Lactalis
29 Dec 16
Two days after Lactalis’s buy-out offer, Parmalat’s share price holds above €2.95. It seems to us that some minority shareholders will try to squeeze more out of Lactalis, as the latter company said it wants to delist the stock. Lactalis is known for being reluctant of making its business public. Amber Capital (which owns 2.8% shares) said it is waiting for at least €4.00 per share. Pending litigation issues (namely with Citibank challenging the damage awards of $431m) make this price quite challenging. Nevertheless, it is not excluded that Lactalis could sweeten its offer.
9M: profitability improves but the outlook remains subdued
14 Nov 16
9M update: revenues are up +2.4% (at constant FX, scope of consolidation and excluding Venezuelan hyperinflation) and -2.4% on reported figures. The EBITDA margin improved by 20bp to 6.8% on a yoy basis but also on a qoq basis (+210bp). By region and at constant FX and scope of consolidation, revenue for Europe was down 0.9% whereas other geographies recorded improved sales (notably LatAm +7.5% and Africa +9.2%).
Q2 looks better than Q1
01 Aug 16
Parmalat released its H1 update. Sales grew +2.3% organically and +1% on reported figures. The EBITDA margin was flat yoy, arriving at 5.7% in H1 (+40bp in Q2). By region and at constant FX and scope of consolidation, revenue was flat for Europe (-0.5% in H1) with a 30bp improvement in margins. In North America, sales were up +2.2%, whereas the margin expanded to 9.8% (+160bp). LatAm was up +13.5 on favourable comps (very weak results in H1 last year). In Africa, sales were up +4.7% but the EBITDA contracted by 17%. Australia was flattish in both sales and margin terms. Net profit for period was up to €45.4m, mainly on lower financial expenses. Full-year guidance was maintained.
Boring FY outlook
11 Mar 16
Parmalat reported its FY results. Revenue was up 15.7% (+6% in Q4) on reported figures and +8.8% on constant scope of consolidation, constant FX and excluding hyperinflation in Venezuela. EBITDA rose +1.1% (-5.8% in Q4), +22.1% on an underlying basis excluding hyperinflation in Venezuela. The EBITDA margin was down 100bp (to 6.9%), impacted by hyperinflation in Venezuela. Net profit was down 28%. The proposed dividend is €0.017. For FY16, the company expects to deliver +5% in net sales and +10% in EBITDA at constant FX, scope consolidation and excluding the effect of hyperinflation in Venezuela.
Q3 update: better underlying performance but hyperinflation in Venezuela weighs on profitability
13 Nov 15
Parmalat released its Q3 update. Net sales at constant currency and scope of consolidation were up +9.3% (vs. 6% in H1) and +31.8% on reported figures (FX -2.2%, scope of consolidation +24.6%, hyperinflation in Venezuela +3.3%). The EBITDA progressed by c. +44% on a constant basis and +25% on reported figures. On a constant basis, all regions except Latin America increased their EBITDA margin in Q3. On reported figures, the Q3 EBITDA margin remains down 50bp yoy due to adverse FX effect as well as hyperinflation in Venezuela. The group confirmed its FY guidance: c. 10% growth for net revenue and about 6% for EBITDA at constant FX and including the contribution of new acquisitions.
13 Feb 17
Middlesbrough-based pawnbroker Ramsdens Holdings is set to join AIM on 15 February. Its growth is not coming from its core business but from providing foreign currency, pre-paid travel cards and international payments. The strategy is to increase the group’s online activities and grow the number of branches. In the year to March 2016, group revenues improved from £29.2m to £30m. The accounts of the main subsidiary show that foreign-currency margin rose from £5.36m to £7.59m. This contributes 35% of group gross profit. By contrast, the core business of pawnbroking, precious metal purchases and retail sales fell from £21.3m to £19.8m. Revenues from other financial services were flat at £2.6m. Ramsdens has 127 sites and last year it made an operating profit of £3.19m. In the six months to September 2016, revenues increased from £16.2m to £18.4m and operating profit improved from £2.81m to £3.48m. The placing will raise £15.6m at 86p a share, valuing the company at £26.5m. NorthEdge Capital, which backed a buyout in September 2014, will receive just over £10m from share sales. The NorthEdge stake will fall from 75.6% to 30.7%. The other £5m will go to the company and be used to repay the remaining loan notes and the costs of the flotation. By the end of March 2016, there were still £4m of loan notes outstanding to NorthEdge, with £4.86m paid off during the previous year.
FY16 pre-close +ve surprise: Raising FY16, 17, 18 PBT c.1%, 4% and 6%
12 Jan 17
Today’s slightly better-than-expected FY16 pre-close trading statement prompts us to raise our FY16 PBT estimate by c.1%, reflecting the combination of (1) growth in several of HFG’s key markets, (2) strong overall operating performance, and (3) favourable fx translational benefits (recalling that 62% of FY15 sales were ex-UK). To reflect the positive profit contribution impact of the Portuguese j/v agreement signed on January 4th, the j/v income line is boosted by €1.5m (c.£1.3m) and €2.5m (c.£2.2m) in FY17 and FY18 respectively, representing upgrades of c.4% and c.6%. Once operating at full capacity utilisation, the j/v could well add €3m (c.£2.6m) in FY19. To reflect (1) our increased FY16-FY18 forecasts, (2) current peer EV/EBITDA valuation multiples, and (3) our view that HFG now deserves to trade at a premium to the peer group in view of its impressively strong financial track record (i.e. FY06-FY16 since IPO) for organic and investment-led profitable growth, combined with an array of emerging, highly promising initiatives (see our note “Start of a new chapter of growth” published on October 4th) to expand the scale and scope of HFG’s core business, we raise our TP to 805p (previously 755p). Maintain BUY.
04 Nov 16
Looking at the top 50 non-listed casual dining and bar operators, it appears that the £80bn market for eating and drinking out in the UK is alive and well. The AlixPartners Growth Company Index (October 2016) shows that 2-year profit CAGR has improved over the last few years, and recent surveys from Greene King, Coffer Peach and Deloitte highlight elevated spend on out-of-home occasions. We attribute this to 1) a shift amongst consumers from an ownership to experience-led mentality which has driven habitual spend on leisure 2) an increasing focus on food from historically wet-led operators as they diversify their revenue streams to mitigate competition from the off-trade and match consumer gravitation towards eating out and convenience; 3) increasing regional penetration resulting from oversupply and high rental costs in London and 4) strong sector support from Private Equity investors, attracted to the Leisure sector's cash flow profile which can be leveraged against. Nevertheless, we may look back on 2016 as the peak for casual dining and bar operator profitability, particularly for London-weighted operators who face unfavourable rent and rate costs as well as potential loss of cheap migrant/seasonal labour. Past performance is certainly not a guide to future performance.
Joy of Techs
21 Nov 16
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.
25 Nov 16
Sound Energy (SOU): Completion of fundraise (BUY)| Ithaca Energy (IAE): Inspection delay (BUY) | Zambeef* (ZAM): Good performance in a challenging year (CORP) | Gresham House Strategic* (GHS): Attractively priced (CORP) |Joy of Techs: Analyst interview | Support Group: Analyst interview
27 Jan 17
We initiate on Hotel Chocolat with a 270p price target and Hold rating. While the investment case is attractive, capturing production efficiencies accounts for half of the 21% PBT CAGR forecast to FY19E. Any slippage in the timing of related capital projects or resulting production disruption could weigh on the stock, which at 37x forward earnings is, in our view, priced for perfection. With the share price up 90% since IPO last year, we suggest investors await a more favourable entry point.