Not as immune to the slowdown as had been expected

Over the past 3 months the market believed that, with its best-in-class profile, Diageo would have been less affected by the overall industry slowdown. Today’s profit warning shows the opposite. We prefer Pernod Ricard in the short term due to the U.S. normalization and its ability to capitalize on the rebound in China. There are still some downside risks for Diageo, but the significant setback today might create an attractive entry point for the stock.

Decent results with reassuring US distributor inventory levels

Despite a weak US performance, organic net sales growth reached the street’s expectations, driven by strong price/mix. In general, consumers have shown resilience in bearing the price increases. Excluding pressure on African beer volumes, organic volume growth was up +1%. The US distributor inventory levels returning to historical levels provide comfort.

Diageo PLC: Major Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (03/23)

Diageo delivered an operating profit and organic top-line growth above the medium-term guidance of the company. Despite the challenging economic environment, organic net sales grew. Net sales were up across all regions. As the company implemented strategic price increases, volume grew. The free cash flow generated shows continued investment in long-term growth. The Super Premium Plus brands of Diageo grew organic net sales. Also, there was strong growth in Guinness, tequila, and scotch. Organic

North America drives the stock down

North America looks to be a concern following what seems to be a clear slow down. Nevertheless, overall organic net sales exceeded the consensus, as did operating profit. Tomorrow’s report from Remy tomorrow will help to draw some conclusions.

Diageo ADR: Initiation of Coverage – Portfolio Split, Competitive Advantage & Other Drivers, Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (10/22)

This is our first report on global alcoholic beverage major, Diageo. The company has had a relatively rough patch over the past few quarters and has failed to meet analyst expectations as a result of strong headwinds, supply chain problems, and geopolitical issues. The past quarterly result was decent as its sales increased by 21%, and every region saw double-digit growth. Volume increased by 10%, while price/mix growth increased by 11 points, with pricing contributing to the balanced growth of

Spirits are still all the rage

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.

The good momentum seems intact

The slight sales and EBIT beat is praised. The absence of FY21 guidance slightly darkens the picture but, overall, the figures send a good signal for the industry.

Everything should go well

We were impressed with Diageo’s presentation as it once again demonstrated its ability to outperform the spirits market, which is itself in a strong position to outperform the drinks industry. Buy and hold.

Diageo's solid FY 2021 wasn't enough for the market

It seems that Diageo’s solid FY21 wasn’t enough to keep the share price up (-2.5% at the opening), but this does not extinguish our confidence in the group. Admittedly, the guidance, which is only qualitative, may seem insufficient and, yes, Diageo is the first spirits group to express concerns about a future decline in the off-trade (ultimately not very surprising!), but we believe that the current positive momentum should continue to drive sales levels above those of 2019 in the months to come

The US strongly helped (and will continue to do so)

The H1 results came in ahead of consensus, helped by Greater China and an exceptional US performance. No FY21 guidance for now, but H2 should show positive growth thanks to strong comparables. We reaffirm our strong confidence on the stock.

Missed FY20 expectations with H2 slightly worse

FY20 top and bottom line missed expectations and Diageo didn’t provide guidance for next year. Improvements expected in the coming months thanks to lockdown restrictions easing, though the margin should still be under pressure for the next six months.

Lowered FY20 sales guidance does not really taint our confidence

Diageo reported H1 results just ahead of peers. However, the lowered FY20 sales guidance and the shy volume growth (+0.2%) have slightly darkened the picture. The strong metrics, still ahead of peers, and the still growing return to shareholders still make it a quality stock for us.

Greggs - FY23 profit expectations reiterated

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.

Carr's Group - Progressing to plan

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.

Taking the Upper Brand: Brands Sector Overview

The earliest dated brand has long been contested; the majority point to Kongō Gumi, a family run construction company that specialised in Buddhist temples in Japan; its documented record of ownership goes back to 578 AD. Like Kongō Gumi, several different brands have withstood the test of time, albeit without then same degree of longevity. The term brand originates from the 1500s and means "to burn" in Ancient Norse and was initially used to mark cattle for ownership. This practice can be consid

SP Angel Morning View: Risk sentiment pulls back on geopolitical tensions and concerns over Chinese property market

Morning Note – 11 September 2023

Carr's Group - Initial look at FY22 performance

Carr’s Group has issued a detailed trading update giving some preliminary financial metrics on FY22 performance. These show both continuing divisions (Speciality Agriculture and Engineering) beating our EBIT estimates, following a strong finish to the year. The shares remain suspended until management finishes the final stages of the audit process, which it believes are ‘essentially complete’. Our note is based on the initial information in the trading update. We will publish a follow-on update

Carr's Group - A new team to take the group forward

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.

Wynnstay Group+ (WYN, House Stock, 430p) - Tough H2 –FY23F downgrades - FY24F recovery

Cranswick - Another strong performance

Cranswick’s H121 results underscore the company’s strength and broad-based positive momentum. Revenues were up an impressive 17% on a like-for-like basis, adjusted operating profit was up 31% to £62m with margins up +50bp, and adjusted EPS was up 30% to 93p, with reported EPS up 12%. The interim dividend was up 12% to 18.7p, and net debt (excluding IFRS 16 lease liabilities) was £54.6m. Cranswick has made a strong start to the year. Management is understandably cautious given uncertainty surroun

THE MONTHLY March 2020

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.

THE MONTHLY April 2020

The Monthly May 2020

There has been much comment on the fact that equity markets in the US and Europe have been shrinking for some years now, certainly in terms of the number of quoted companies, if not in total market capitalisation (MCap). This paper has been written with the assistance of the Quoted Companies Alliance (QCA) and focuses on the evidence for such in the London market and, in particular, that for smaller and midcap companies. It assesses that evidence and considers explanations. Finally, we ask why i

The Monthly June 2020

Much has been written about the effects of the virus on the world and on the stock market. Here is one analyst’s take on some of the likely impacts on the way we should look at companies. This article was originally produced as a blog, “10 Changes Post Virus”, which was published a few weeks ago.

THE MONTHLY July 2020

A number of REITs have the ability to thrive in current market conditions and thereafter. Not only do they hold assets that will remain in strong demand, but they have focus and transparency. The leases and underlying rents are structured in a manner to provide long visibility, growth and security. Hardman & Co defined an investment universe of REITs that we considered provided security and “safer harbours”. We introduced this universe with our report published in March 2019: “Secure income” REI

UK Food to Go

Ongoing labour cost challenges, higher input costs, sustained brisk organic sales volume growth and further room for innovation at both product and distribution level were the key investment features of the 2018 British Sandwich & Food to Go Association AGM and Conference, which was held in London yesterday. Moreover, the association had strong messages on food waste reduction and CSR, both of which are important as the industry body continues to lobby the UK government hard ahead of Brexit. The