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INDUSTRIA DE DISENO TEXTIL
INDUSTRIA DE DISENO TEXTIL
FY16 figures come as no surprise
15 Mar 17
Inditex preserved its pace of growth during Q4, leading to a full-year sales’ increase of 11.5%. Group sales amounted to €23.31bn. Same-store sales edged up by 10% boosted by a favourable momentum experienced in all regions and across all brands. The gross margin retreated by 80bp to 57%, generating a gross profit of €13.28bn. EBITDA rose by 8% to €5.08bn. The cut in the operating margin was limited to 35bp to 17.24% with an operating profit of €4.02bn. Net profit amounted to €3.16bn (+9.7%). Higher profits have consolidated the net cash position further, to €6.1bn vs. €5.3bn a year earlier. Capex amounted €1.4bn, incurred mainly on developing logistics and commercial expansion whether in stores or online. Ytd sales were up 13% at CER. The board proposed a dividend of €0.68 (+13.3%).
Always living up to promises
14 Dec 16
The market momentum remains always favourable for Inditex. The growth pace was maintained in Q3 with an 11% surge in sales over the first nine months (+11% in H1) to reach €16.4bn. The strengthening euro has hit the performance only mildy as the sales increase amounted to 14.5% in local currencies. Margins have retreated slightly due to a 90bp slump in the gross margin (57.9%). EBIT was up 9% to €2.8bn, i.e. an operating margin of 17.2% vs. 17.5% a year earlier. Net income came to €2.2bn (+9%). The financial structure remains solid with increasing net cash from €5.1bn in October 2015 to €5.7bn in 2016. The positive momentum is confirmed in early Q4 with sales surging by 16% (in local currencies) up to 12 December. Global expansion is well on track in both physical stores and online. The group operates 7,240 stores in 93 markets.
21 Sep 16
The largest global retailer outperformed with 11% sales growth in H1 16 to reach €10.47bn. Forex moves have slightly halted the performance as sales in local currencies were up 16%. Organic growth remained strong at 11%. All the group’s brands experienced favourable momentum with a marked outperformance for Zara’s home concept which grew by 17% to €343m. The regional breakdown of revenues remained flat, where Europe contributed 60% to revenue and Asia less than 25%. The gross margin retreated by 1.3ppt to 56.8% bringing the gross profit to €5.9bn (+9%). EBITDA amounted €2.1bn, 7% higher than in H1 15. EBIT rose by 8% to €1.6bn. Net profit was up 8% to reach €1.26bn. The strong operational performance preserved a solid financial position with 13% surging net financial cash at €4,923m and a marked low debt level (€127m). WC remained almost flat at €-2,176m vs. €-2,239m a year earlier. The downstream expansion is ahead of schedule with 83 net openings in 38 markets, bringing the distribution network to 7,096 stores in 91 markets. Online sales are well on track. The start of H2 16 is promising as sales in local currencies have increased by 13% from 1 August to 18 September 2016. A final ordinary dividend of €0.30 per share will be payable on 2 November.
Growth well on track
15 Jun 16
Q1 16 sales were up by 12% to €4.9bn, held back partially by currency moves as the performance in local currencies was 17%. In Q1 16, Inditex consolidated its presence in 31 markets with 72 new openings, leading to a network of 7,085 stores by the end of April vs. 6,746 a year earlier. The platform expansion, both physical stores and online, raised operating costs by 10% and lowered the gross margin by 130bp yoy to 58.1%. EBITDA increased by 7% to reach €955m, leading to an EBITDA margin of 19.6% vs. 20.5% in Q1 15. EBIT amounted to €705m (+6%). Net profit increased by 6% to €554m. The strong operational performance sustains the solid financial position with a high cash position and low debt level. Net financial cash came to €5bn compared €4.1bn in Q1 16. The operating working capital was €-2bn. Q2 16 started in good shape as sales surged by 15% in local currencies up to 13 June. The Board will propose an annual dividend of €0.6, of which an interim dividend of €0.3 has already been paid to shareholders.
Immune from slowdown
18 Dec 15
The nine months’ sales grew by 15.7% yoy to €14,744m through 6,913 stores across 88 markets, i.e. a net channel expansion of 136 new stores in Q3 15. Europe contributed 47.4% to the nine months’ sales, followed by America at 20.4% and Asia & the rest of the world at 32.2%. Profitability was as guided with EBITDA increasing by 18% to €3,328m. EBIT amounted to €2,583m, drawing a net profit of €2,020m, i.e. 20% growth. Gross cash increased from €3,626m in October 2014 to €4,982m a year later.
28 Mar 17
ClearStar* (CLSU): Building a background for growth (CORP) | Sound Energy (SOU): TE-8 results (HOLD) | LiDCO* (LID): 2017 should be a transformative year (CORP) | Proteome Sciences* (PRM): FY 2016 in line. Moving towards breakeven (CORP) | Fulcrum (FCRM): Significant market potential, rising margins and a strong balance sheet (BUY) | Mortgage Advice Bureau (MAB1): Strong and growing intellectual property (BUY) | 7digital* (7DIG): Open offer result (CORP)
Small Cap Breakfast
28 Mar 17
Path Investments—Publication of prospectus from the Energy Investment Company. Raising £1.4m. Admission due on or around 30 March | Franchise Brands—Schedule 1 detailing £28m reverse takeover of Metro Rod. Admission expected 11 April | Alpha FX Group— Schedule 1 from the foreign exchange provider focused on managing exchange rate risk for UK corporates that trade internationally. Fundraise TBC. Admission expected 7 April. | K3 | Capital Group—Schedule 1 from the Group of business and company sales specialists across business transfer, business brokerage and corporate finance. Admission date and fundraise details TBC. | Integumen— Schedule 1 from the personal health company developing and commercialising technology and products for the human integumentary system. Raising £2.16m at 5p. Expected market cap £8.16m. Admission expected 5 April. Tufton | Oceanic Assets– Offer extended to 9 May to enable investors to complete further due diligence.
Strong set of full-year results, comforting guidance
23 Mar 17
GVC released a solid set of full-year results. Key highlights Pro forma Net Gaming Revenue (NGR) was up 12% at constant currency, or 9% on a reported basis at €895m, in line with the February trading update. Pro forma clean EBITDA was up 26%, at €205.7m, bang in line with AV’s €206m forecasts, translating a three percentage points increase in margin added to the growth in revenue. c.69% of NGR was derived from markets either regulated (including those in the process of regulating) and/or locally taxed (68% in 2015), while 95% of the revenues were derived from GVC’s proprietary platform. Net debt stood at €131.5m or 0.6x clean EBITDA. The board proposed a second special dividend of €0.15, giving a total dividend of €0.30 per share for the year, beating market expectations. Guidance The start of 2017 seems promising as management said that daily NGR had increased by 15% (+16% cc), translating into an 18% (+19% cc) growth in sports labels’ daily NGR and a 6% (+8% cc) increase in games labels’ daily NGR. The gross win margin reached 9.5% while it should move towards the 10% mark on the long term. Regarding dividends, the group confirmed a progressive distribution policy and expects to distribute at least 50% of the group’s free cash flow, starting from 2017. Debt refinancing In the first quarter of 2017, the group issued a €320m Senior Secured Term and Revolving Facility, composed of a €250m term loan (maturity 6 years) and a €70m revolving credit facility (maturity 5 years) used to pay down the Nomura Loan in full.
N+1 Singer - Morning Song 23-03-2017
23 Mar 17
eg solutions (EGS LN) Re-focusing on sales is delivering rewards | Futura Medical (FUM LN) FY results: continued clinical, regulatory and commercial progress | Halfords Group (HFD LN) Confidence in FX mitigation grows; stay at BUY | IFG Group (IFP LN) Top line growth but earnings pressures remain | Realm Therapeutics (RLM LN) FY results in line; on track for Phase II start in 2017 | Safestyle UK (SFE LN) Another good full year performance but valuation up with events | WYG (WYG LN) Mixed conclusion to FY17, reassuring FY18 outlook
Driven by distribution
24 Mar 17
Following results earlier this month, we publish our new forecasts following the segmental consolidation of divisions, and remain cautious relative to consensus (c.2% below at the PBT level in FY18E) mainly due to our UK assumptions. We believe the valuation is relatively attractive, and Inchcape is well placed for further growth given the strength of its balance sheet as it seeks to further utilise its unique global market position.