Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on SONAE. We currently have 3 research reports from 1 professional analysts.
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19 Jan 17
Sonae impressed with 8.8% growth over the last quarter, raising its FY16 sales to €5,198m. The Food Retail business, through Sonae MC, increased sales by 5.6% during the whole year to reach €3,687m. Specialised Retail, including electronic and clothing, was the star performer for the retailer with an 11.2% increase. Retail properties delivered €72m revenues vs. €121m the year previously.
Persistent pressure on margins
11 Nov 16
Sonae released a 6.7% increase yoy in 9M total sales to €3,882m, mainly driven by the retail operations (4.1% lfl growth over Q3). EBITDA has slightly enhanced, benefiting from non-recurrent items, albeit the underlying EBITDA is below the FY2015/16 level. Most divisions experienced declining profitability. Sustained by indirect results including the mark-to-market effect of NOS, net profit stood at €141m vs. €146m a year ago. Sonae succeeded in lowering its net debt to €1,248m, despite committing greater capex predominantly in Food and Specialised Retail. Sonae Sierra manages a retail real estate portfolio with a €909m book value, of which 22% is freehold.
Margins missed our expectations
21 Mar 16
Driven by positive growth in Food and Non-food retail formats, FY 2015 sales increased by 0.8%, yoy to €5,014m. The strong sales momentum for Food retail in Q4 supported this performance (+1.8% yoy and positive lfl). Retail property continues to generate cash (despite lowered level compared to 2014) following its high profitability. Net book value of the capital invested in Sonae MC, SR and IM real estate assets amounted, at the end of 2015, to €1,047m. Accounted as an equity associate, Sierra’s result experienced a 15.9% jump, benefiting from the asset valuations and the yield compression. However, the depreciation of the Brazilian real offset the 2.8% tenant sales increase in Brazil and 2.0% rise in Europe.
Retail sales still in trouble
17 Mar 17
Excluding fuel, Sainsbury’s Q4 retail sales were down on a lfl basis vs. a 0.1% uptick over the Q3. Following this disappointing quarter, FY 2016/17 retail revenues declined by 0.6% on a lfl basis. Including fuel, this came in at 0.2%. Argos’s sales delivered strong 4.3% lfl growth. Together, Sainsbury’s and Argos’s lfl sales were by up 0.3%. Sainsbury continues to lag behind Morrisons, the latter’s sales impressed with 2.5% lfl growth over the last quarter and 1.7% over the whole year. Regarding the outlook, management remains cautious about the highly competitive market and the cost price pressure impact.
Small Cap Breakfast
29 Nov 16
Asia Pacific Investment Partner - the research-driven emerging and frontier markets real estate development business intends to float on AIM and conduct a placing in December RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m Diversified Oil & Gas— Schedule One now out. $60m to be raised. Expected admission 6 December. Creo Medical Group —UK based medical device company focused on surgical endoscopy, a recent development in minimally invasive surgery. Admission due 7 December. Fundraising details TBA.
Turnaround plan starts lifting profitability
10 Mar 17
Morrisons announced FY 16/17 sales at £16,317m, slightly higher than our expectations. Margins rose leading to a £305m net result, i.e. a net margin of 1.8% vs. 1.3%, a year ago. Morrisons succeeded in reducing its net debt despite a stronger capex, mainly thanks to improving cash flows from operations. The proposed dividend is about 5.43p per share vs. 5p a year ago (5.16p in our model). Regarding the outlook, Morrisons reiterated caution about Brexit’s impact on depreciation and pension costs (£272m surplus in the wake of the triennial valuation). Management remains confident of a £50-100m incremental profit as a medium-term target (vs. £18m this year) thanks to further cost savings (beyond £1bn) and the strong broader business (Ocado and Amazon). Net debt should continue to fall (less than £1bn by the end of 2017/18) due to improving working capital control.
Lower than expected margin
24 Oct 16
Jeronimo Martins released strong Q3 sales growth leading to a 5.5% rise over the last nine months. Total sales reached €10,738m and EBITDA stood at €626,9m, i.e. an EBITDA margin at 5.8%, flat compared to 2015. The 9M net result came in at €501.6m, including gains from the Monterroio disposal for €224m. Adjusted net profit amounted to €266m, 5.6% yoy, boosted by a lower cost of debt. Biedronka remains the main driver for both the group’s top-line and profitability which offset a slight decrease in the Polish business margin (10bp). The underperformance of Ara and Hebe is more pronounced this year due to Ara’s network expansion (expected to be above 2015’s level). Despite the substantial capex, JM continues to enjoy a solid balance sheet with a lower debt burden (reaching €326m vs. €658m in 2015).
17 Mar 17
Following Thursday’s celebrations, confidence flagged somewhat in the overnight markets. European and Asian equities had raced higher yesterday on the back of a more dovish than expected tone from Janet Yellen, a recovery in mineral/commodity prices and a firm rejection of populism from the Dutch election. The Stoxx Europe 600 rose 0.7% to its highest close since December 2015, led by mining and oil companies, while the internationally-traded Hang Seng spiked back to levels not seen for two summers. By mid-afternoon, however, the US$ had retreated on slower rate-increase expectations, as Donald Trump revealed plans to slash environmental and foreign aid budgets to fund increased military spending. In his first budget, the President outlined proposals to cut more than US$10bn from the Department of State and USAID, an agency which works to fight poverty across the globe. His ‘America First’ draft meanwhile set aside US$639bn for the Department of Defense, a US$52bn year-on-year increase and the largest since Ronald Reagan was in office, while trimming the Department of Health and Human Services' funding by 18% (US$15.1bn) and education by 13% (US$9bn). These big numbers rather took the puff out of US equities, as analysts pointed to the Health-care sector as the obvious loser given increased expectation of higher regulatory costs and cuts in federal funding, while Energy stocks also suffered as US crude prices retreated below US$50 once again. This meant the three principal US equity indices ended fractionally mixed after a rather anticlimactic session as Treasury Secretary, Steve Mnuchin, insisted the Trump Administration did not want a trade war but was determined to rebalance unfair international trading relationships. Investors may hear more from him on this later today, when he attends a gathering of the world’s G20 finance chiefs. Asian equities ended similarly mixed with mostly just small moves, as traders foresaw new pressure from Mnuchin to boost the value of what his President considers deeply unvalued currencies. Yesterday was also the Bank of England’s turn to surprise a little. Not that it changed its base rate, but the fact that one official dissented in favour of higher borrowing costs while others hinted it might not be long before they do the same. This unexpectedly hawkish signal comes as Theresa May prepares to trigger divorce talks by the end of this month, while inflation is almost certain to breach the BoE’s target 2% level in the first half and possibly exceed its projected 2.4% peak in the second. That said, market consensus remains for no change to UK rates throughout 2017 while sensitive Brexit negotiations get underway, even if it was enough to see the Pound recover a little and Gilt yields rise. UK macro releases due today are limited to the BoE Quarterly Bulletin, while the EU produces January Trade Balance and Construction Output figures. The US is scheduled to release Industrial Production, Capacity Utilisation and the Michigan Consumer Sentiment Index. UK Corporates due to report earnings or trading updates include Sthree, Berkeley Group, Goodwin and Investec. Traders will also be listening out for any feedback from the meeting scheduled for President Trump and Chancellor Merkel in the company of various of Germany’s industry giants; the US$65bn trade deficit and apparently engineered weakness of the Euro will likely be the focus points. Such a mixed bag of sentiment drivers is likely to mean London equities open unconvincingly this morning, with the FTSE-100 giving back some of yesterday’s gains after having rallyied to a new record close. The index is seen down 10 points in opening trade.