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.
Companies: Dairy Crest Group
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.
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.
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.
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.
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%
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%.
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.
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.
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.
As rates rise, "yieldy" stocks require careful consideration. Sustainability/track record key.
Cheese manufacturer saw adj PBT increase 19% and EPS 22%
Carr’s “in line” Q3 statement confirms progress | Dairy Crest Q1 – “in line” complements 4% yield
Companies: Carr's Group PLC (CARR:LON)Dairy Crest Group (DCG:LON)
Supporting the agribusiness growth story | Dairy Crest – opportunity and new numbers
Companies: Zambeef Products PLC (ZAM:LON)Dairy Crest Group (DCG:LON)
The British referendum on EU membership is scheduled for 23rd June 2016. While opinion polls and bookmaker odds still bias towards “remain,” it makes some sense to assess briefly potential the FMCG winners and losers in the event of Brexit happening.
Companies: BATS DGE IMB RB/ SAB ULVR BAG BVIC CARR CWK DCG FEVR GNC PIL STCK TYR
Research Tree provides access to ongoing research coverage, media content and regulatory news on Dairy Crest Group.
We currently have 14 research reports from 1
Both of Carr’s Group’s divisions have continued to operate throughout the coronavirus lockdowns as they serve key markets. While adjusted PBT was 17% lower year-on-year during FY20 because of an unseasonably mild winter in the UK and delays in engineering contracts, a pick-up in US cattle prices at the year-end helped deliver a full-year result ahead of our estimates, which were revised down in March.
Companies: Carr's Group PLC
Cake Box’s interim results reconfirmed the company’s resilience in the face of extremely adverse circumstances for UK High Street retailers. Cake Box reported only single digit declines in sales revenue and profits in the period as the business benefited from its flexibility, financial strength, and an ongoing customer commitment to celebration. In our view, celebration’s resilience as a category, product innovation, increased outlets, and a commitment to “steady, sensible and sustainable” growth, augur well for further revenue expansion. Yet the group’s valuation remains attractive.
Companies: Cake Box Holdings Plc
Nichols has issued a 9m trading update to the end of Sept and a full year outlook. Following on from H1, it is pleasing to see further positive momentum across the dominant activities of UK Vimto Packaged and International (c70% FY19 sales), whilst the cash position remains very healthy. Unsurprisingly OoH has remained significantly challenged (Q3 sales -45%), but we welcome the positive actions signalled this morning to align costs to a period of softer revenue whilst its main end market of hospitality navigates a pre/post Covid-19 landscape. Full year PBT guidance is for £11-13m - down c60% y/y, reflecting high operational gearing at OoH from a >£25m loss of sales. With FY21 a year of partial profit recovery, FY22 is of greater relevance from a valuation perspective and whilst guidance remains suspended, we see a pathway to get to 80-85% of our previous FY20 PBT of £29m. This would imply EPS of c53p, set against a 10 year P/E average of 20.4x. Overall, we feel OoH uncertainty is priced in and should not overshadow the ongoing resilience of core activities, as well as the fundamentals around longevity/growth prospects of the Vimto brand, geographical diversity and a strong c£44m of net-cash to capitalise on future opportunities.
Companies: Nichols plc
Today's news & views, plus announcements from KGF, MRO, UU, BAB, BRW, FUTR, GNS, HICL, LIO, AEXG, FUL, KWS
Companies: AEX GNS HICL
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” REITs – Safe Harbour Available. Here, we take forward the investment case and story. We point to six REITs, in particular, where we believe the risk/reward is the most attractive.
Companies: AGY ARBB ARIX BUR CMH CLIG DNL HAYD NSF PCA PIN PXC PHP RE/ RECI SCE SHED VTA
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 surrounding both the pandemic and Brexit, but the outlook for the current year remains unchanged.
Companies: Cranswick plc
Animal Health is a vast market with multiple long-term growth characteristics and opportunities. In this report we have outlined valuations, M&A activity and the key growth drivers in two animal health subsectors: companion animal health and livestock health. Although the commercial positioning of the eight companies covered in this report (Animalcare, Anpario, Benchmark Holdings, CVS Group, Dechra, ECO Animal Health, Genus and Pets at Home) differ significantly, all have exposure to positive market trends.
Companies: GNS ANCR CVSG DPH BMK EAH ANP PETS
Diversified Gas & Oil is paying $575m for further oil and gas assets in the Appalachia basin. This will enhance earnings as well as enable a significant increase in dividend. The deal is partly financed by a placing raising £189.5m at 97p a share. This is the third time in little more than 12 months that Diversified has raised cash at a share price above the flotation price.
Companies: FPO DRV APP WYN AAU CRPR
Premier Foods’ H119 results demonstrate the business has become more resilient under the stewardship of outgoing CEO, Gavin Darby. Revenue growth of 1.0% in Q2 despite the hot summer was encouraging, and the UK relaunch of the Mr Kipling brand has clearly gone well. The news that Ambrosia may be sold suggests yet another step in the business transformation, although the price will determine the level of dilution and any change to net debt/EBITDA.
Companies: Premier Foods plc
Warren Buffett once said that as an investor, it is wise to be ‘fearful when others are greedy and greedy when others are fearful’. Fear is not in short supply right now.
Companies: OPM ALU ANCR BLV CONN CRC STU GATC HAT LEK MMH MCB MWE NXR NTBR NOG PAF PEG RFX SRC TEF TEG TPT VTU WYN XLM
The trade-off in the risk/reward for gold and gold mining equities is improving, as central banks push the current iteration of the post-World War II Bretton Woods financial order towards its limits.
Companies: AVO AJB AGY ARBB BUR CLIG DNL DPP FLTA GTLY GDR MCL MUR NSF PCA PIN SRE PHP RE/ RECI RMDL STX SCE TON SHED VTA W7L
As flagged in an interim management statement in January, Carr’s Group’s UK agricultural activities have been adversely affected by the mild winter that has depressed demand for feed and feed supplements. Based on the order pipeline, management had expected this would be balanced by overperformance in the Engineering division, but delays in receiving orders will lead to underperformance here as well. We cut our FY20 and FY21 EPS estimates by 26% and 10% respectively and reduce our indicative valuation from 190p/share to 172p/share.
Premier Foods’ FY20 results demonstrate the substantial progress the company has made over the past few years. The UK business has now grown for 11 consecutive quarters and Q121 is set to be very strong. In the UK the brands grew ahead of their categories and the innovation rate has hit a new high. A new landmark pensions agreement was signed in April, which could potentially significantly reduce the future funding requirements for Premier Foods. The recent triennial actuarial valuation delivers further credence to the pensions deal.