Recent Share Price Weakness Unjustified - Upgrade to BUY

Dairy Crest’s (DCG LN, BUY, T/P 680p) recent share price weakness – which leaves 25% upside to our recently revised price target – is, in our view, unjustified. With leading brands in both cheese and cooking oil, as well as phenomenal performance in spreads H1 performance, any suggestion that Dairy Crest should be a slave to dividend yield is in our opinion wrong. We raise our recommendation from HOLD to BUY.

Key Brands Power Ahead in H1 with +16% Sales Growth

Dairy Crest (DCG LN, HOLD, T/P 680p) released interim results broadly in line with both market and our own expectations. Net revenue increased sharply from £190m to £220m, while adjusted PBT rose 8% to £20.0and EPS advanced 7%. We leave our forecasts unchanged for the full year but note the strong first half. We raise our price target from 630p to 680p.

Nuneaton Investor Day- Plain FMCG Talk

Dairy Crest’s (DCG LN, HOLD, T/P 630p), Nuneaton investor day – held on 19th September immediately after its 18th September trading statement - significantly confirmed the benefits of its decision to dispose of its dairy activities, which left the company on 26th December 2015. Not only did the transaction raise group margins from 5% to 16% but also it enabled Dairy Crest to operate fully as a branded FMCG company.

Trading Cheer ahead of Nuneaton Investor Day

Dairy Crest (DCG LN, HOLD, T/P 630p), which is due to host an investor day in Nuneaton on Tuesday 19th September, issued a trading statement today for the six months to 30th September 2017. The overall conclusion was positive for key brands, by-products and tended to confirm expectations for financial forecasts. In addition to tomorrow’s site visit and presentations, there will be a senior management Q&A session this evening in relation to today’s statement.

Nuneaton Investor Visit to Confirm Momentum

Dairy Crest (DCG LN, HOLD, T/P 630p) is due to release a trading statement on 18th September ahead of its two day capital markets event in Nuneaton, which begins on the Monday evening. The schedule includes Q&A regarding the trading update, plenary presentations and a site tour. The trading statement refers to the 6 months ending 30th September 2017. Relatively easy volume comparisons for Cathedral City should be a feature.

Cathedral City Drives Strong Start to FY2018

Dairy Crest (DCG LN, HOLD, T/P 630p) Q1 trading statement, released ahead of today’s AGM, confirmed a strong start to the year for the Cathedral City cheddar cheese brand, which enjoyed 15% volume growth. Overall, volume performance for Cathedral City, Clover, Frylight and Country Life was positive to the tune of 7%

FY2017 prelims confirm H2 revenue rebound

Diary Crest’s (DCG LN, HOLD, T/P 630p) full year FY2017 revenue missed market expectations by around 1½% to record £417m compared with £422m in FY2016. Adjusted pre-tax profits and EPS were in line at £60.6m (+5%) and 35.2p (+3%) respectively. The proposed final dividend increase is 2%.

Updating growth outlook for by-products

Dairy Crest (DCG LN, HOLD, T/P 630p) releases preliminary FY2017 results on Thursday this week. Our £424m expectation for sales revenue is similar to £423m Bloomberg consensus. However, we are more optimistic about margins. We look for £93.7m of EBITDA and 38.1p of adjusted EPS compared with figures of £89.1m and 35.3p respectively, which appear on Bloomberg.

Way to Grow

The central message from Dairy Crest’s (DCG LN, HOLD, T/P 630p) 20th September 2016 capital markets day still stands in our view. The company is well placed for modest domestic growth while enjoying significant headroom internationally. Moreover, cash generation and dividend paying capabilities remain clear and argue positively for near term share price performance.

Cathedral City back into growth

Dairy Crest’s (DCG LN, HOLD, T/P 630p) released a Q3 trading statement today which was in line with expectations. Cathedral City’s performance improved, after being slow in H1. The brand’s positive momentum is expected to continue into FY2018. Combined volumes of core brands are now in line with the same period last year.

Carr’s “in line” Q3 statement confirms progress

Carr’s “in line” Q3 statement confirms progress | Dairy Crest Q1 – “in line” complements 4% yield

Supporting the agribusiness growth story

Supporting the agribusiness growth story | Dairy Crest – opportunity and new numbers

UK FMCG winners and losers from Brexit

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Hardman & Co Healthcare Index: 2023 – Capital demands dent performance

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BWMX: 1Q Preview: Moving to the Offensive; Reiterate Buy, $22.50 PT

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Nichols - Juicy profits and cash generation

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Hybridan Small Cap Feast - 11 Jan 23

11 January 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

FY19 in line but Middle East excise duty headwind

Nichols’s trading update signals an in-line FY19 outcome driven by UK market share gains and good international progress. The main news today is the recent 50% excise tax on non-carbonated drinks in Saudi Arabia/UAE. This is a headwind going into FY20 which at this juncture is extremely difficult to quantify given c.80% of in-country sales of Vimto in the Middle East are made during the one month of Ramadan. Our analysis shows a potential c.£2.5-£4m PBT hit. Given the uncertainty we prudently fa