Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on MCCOLL'S RETAIL GROUP PLC. We currently have 4 research reports from 2 professional analysts.
|27Mar17 17:06||RNS||Holding(s) in Company|
|24Mar17 07:00||RNS||Annual Financial Report|
|22Mar17 13:10||RNS||Holding(s) in Company|
|15Mar17 17:12||RNS||Long Term Incentive Plan Awards|
|06Mar17 12:25||RNS||Holding(s) in Company|
|27Feb17 07:00||RNS||Final Results|
|21Dec16 12:02||RNS||Price Monitoring Extension|
Frequency of research reports
Research reports on
MCCOLL'S RETAIL GROUP PLC
MCCOLL'S RETAIL GROUP PLC
21 Dec 16
"With markets winding down for the Christmas and New Year break, International equities remain very much the favoured investment. The continuing rout across global bond markets appeared to gather pace yesterday from the fallout of the supposed terrorist attacks in Germany and Turkey, as investor concern for a potentially wider series of IS-directed extremist assaults across Europe’s capitals to unnerve its populations, the backlash of which could result in further sharp swings toward more populist governments during the various presidential and general elections expected in the New Year. Right now the threat may not seem very real, but with the possibility of an early vote to replace Italy’s recently-installed caretaker government and France’s presidential election scheduled for May, well-prepared opposition parties in the shape of Beppe Grillo’s Five Star Movement and Marine le Pen’s National Front etc. are positioned to challenge the very existence of the Eurozone. During these quite exceptional times, with authorities still apparently totally out of touch with their electorate, such a threat simply cannot be discounted, the ultimate cost of which could even be for independent nations to choose reversion to their legacy currencies with the potential to create widespread default. Such lingering fears will likely hinder Europe’s opening this morning, despite the Dow Jones chalking up yet another all-time high overnight, closing just shy of the psychologically important 20,000 mark, with all the principal US markets also making reasonable gains as optimism that Trump-inspired reflation and proposed investment will provide a significant medium-term boost to earnings. Asia was also in a good mood, with broad gains seen in just about all regional markets most notably with even China playing catch-up following a couple of days of weaker trading as economists speculated on the potential for a PBOC-directed tightening of liquidity during Q1’2017. Other than release of Public Sector Net Borrowing figures this morning, the UK is not due to release any significant macro data, while the US is scheduled only to provide MBA Mortgage Applications and Existing Home sales data ahead of a larger swath of figures tomorrow and Friday. Very little is also happening on the corporate front this morning, with earning or trading updates due from just a few second-liners including CH Bailey (BLEY.L), Premaithia Health (NIPT.L) and Water Intelligence (WATR.L). Investors will, however, be keen for any further media comment following the Prime Minister, Theresa May’s reported backing for the UK to be permitted to enter a ‘transitional period’ in order to adjust to the new economic order prospectively resulting from Brexit. Accepting the need for a soft, rather than hard, landing could provide significant relief for those fearful that a clear post-Article 50 plan is still not in place. The FTSE100 is seen around 10 points weaker during this morning’s opening trade. " - Barry Gibb, Research Analyst
02 Dec 16
"By late Sunday, we should have a good idea whether or not Italian Prime Minister, Matteo Renzi, will be stepping down. The polls suggest his constitutional referendum, which has effectively become a confidence vote on his premiership, will get a 'thumbs down'. No new election is actually required until February 2018, but any attempt to simply replace him with another technocrat leader could well see a public, suffering from implosion of their bad-debt laden banking system, 38% youth unemployment and an inability to stifle giant capital outflows, clamouring for a snap election. This, of course, would open the door for Bepe Grillo's Five Star Movement, whose denouncement of the Euro could, in turn, generate in a wave of similar populist referendum voting across other dissatisfied EU nations, with France's own presidential election, due to take place on 7th May, the headline this morning following Francois Hollande's overnight declaration that he has decided not to stand. The prospect of Eurozone's collapse, however, was not the driver of the US session, which started in the positive following release of strong November Manufacturing ISM data, but waned later as a sell-off amongst tech issues pushed the NASDAQ sharply down, while the Dow Jones managed to hold onto modest gains due to sustained switching into financials, as divergence between the two sectors and the rout in government bond markets since Trump's election continued. Asian shares were lower across the board, with the Nikkei suffering as the Yen found buyers amongst US$ sceptics waiting for flaws in the Trump rally to show through, which dragged the other regional markets with it. With investors now virtually taking a 25bp hike by the Fed later this month for granted, focus this afternoon is likely to centre on the important US employment report, with forecasts in the 180k to 200k range, taking unemployment to 4.8% with a modest rise in hourly earnings of around 0.1%. The UK will also report Construction PMI figures this morning while corporates due to disclose earnings or trading updates include 88 Energy (88E.L), Altona Energy (ANR.L) and Berkeley Group Holdings (BKG.L). Traders meanwhile continue to watch oil futures carefully; although prices moderated during the Asian session, sentiment following OPEC's agreement remains positive with January's light, sweet crude trading a whisker below US$51 on the Mercantile Exchange, as they weigh up expectations on the terms being upheld or the various participants instead deciding to cheat on quotas rather than give up market share to US shale producers. London equities opened in a nervous mood this morning, with the FTSE-100 down over 57 points in early trading." - Barry Gibb, Research Analyst
02 Sep 16
The UK economy provided yesterday's biggest surprises for investors. Manufacturing PMI data recorded its biggest monthly increase in a quarter of a century for August, as production and new orders recovered sharply to a level of 53.3 from the initial post-Brexit shock three-year low of 48.2 recorded in July. Sterling jumped as much as 1.35% to over US$1.33, as the IMF concluded that post-Referendum growth had 'surprised on the upside', while measures taken by the Bank of England to boost expansion would 'support the economy' and cushion part of the negative impact. As a result, London's two principal equity indices moved in opposite directions; the FTSE-100, whose constituents derive over 70% of their earnings internationally, reversed early gains to be knocked by Pound strength, while the more domestically weighted FTSE-250 bounced a similar amount into the positive. Reflecting further on this, and ahead of today's key US jobs data, the FTSE-100 is expected to recover part of yesterday's losses, rising around 16 points during early trading. US equities ended unchanged to fractionally positive yesterday evening, with recent oil prices weakness making energy stocks the session's main casualty; anything significantly stronger than the consensus figure of 185,000 new jobs added during August, taking the unemployment rate to 4.8%, will likely build confidence and raise expectations that the Fed could finally deliver a rate hike later this month. Asian equities had an uneventful session, with the ASX the only notable mover as its energy shares remained under similar pressure. Elsewhere in the region, equities generally trod water waiting for this afternoon's release from the US as traders pondered the extent to which an early hike would suck foreign capital out of its emerging markets, although clearly such a move by year-end will already have been largely priced in. The UK will release UK Market Construction Index data this morning, while this afternoon, the Fed's Jeffrey Lacker may be the first to reflect on the US Jobs data in his scheduled speech. Corporates due to release earnings figures this morning include EMIS Group (EMIS.L), Fyffes (FFY) and Go-Ahead Group (GOG.L).
Disciplined control of costs
30 Jul 15
In a challenging food retail environment, McColl’s has delivered solid H1 results and reiterated guidance for the year. What strikes us as most impressive in these results is, yet again, the company’s strong focus on cost control. Administrative costs are well under control despite a significant store conversion programme, coupled with the acquisition of new stores and added services. We believe the long-standing management has a good growth strategy in place, and with more of the estate being converted to better-performing formats, like-for-like sales should pick up over time. Hence updated consensus forecasts post the interim results look too low in our view. Valued at a steep discount to the sector and as a main player in the growing UK convenience market, we consider the high dividend yield of 6.2% an added bonus.
Stunted growth in the two main markets
18 Apr 17
Casino released Q1 sales showing an 11.6% growth yoy, driven by a +30.2% increase in LatAm retail revenues. Total sales came in at £9,321m, i.e. a 7% decline sequentially as the French operations underperformed. The latter suffered from struggling hypermarkets compared to a strong Q1 16, with only tiny growth in food sales on a same store basis. The online business, Cdiscount, progressed by a small 1.5%. In LatAm, Casino’s sales were boosted by a positive FX effect mainly for its Brazilian operations (+28% appreciation in Real). Despite decreasing inflation, GPA improved by 9.5% on organic growth sustained by volume recovery in Multivarejo and continuing strong growth in Assai. However, on a same store basis, food sales growth retreated from 7.8% in 2016 to 5.8%. The discontinued Via Varejo benefited from a favourable basis of comparison for both Offline and Online operations. Regarding other LatAm operations, Casino’s organic growth is driven by good same-store performances in Uruguay and expansion in all regions.
Diversification while the core business is struggling
05 May 16
Sainsbury’s FY 2015/16 sales decreased by 1.1% to £23.506bn as food deflation remains low and, as the second largest UK grocer, it continues to cut prices. Despite the cost saving plans (£225m), the underlying operating profit for retailing lost ground to reach £635m. Net profit stood at £471m vs. a negative result over the last year, of which £628m was impairments and onerous contract charges. Net debt including perpetual securities accounted for £2.343bn, a slight decrease compared to 2014/15. Sainsbury lowered its pay-out as it proposed a FY dividend of 12.1p per share vs. 13.2p in 2014/15 (vs. 5p expected by our model). According to management, the Home Retail Group acquisition will take place in Q3 16.
Historical accounting fines pulled down Tesco's profit
12 Apr 17
Tesco released its FY2016/17 results which showed 2.7% organic sales growth yoy to £55,917m and underlying operating profit of £1,280m, i.e. a 2.3% margin. During this year, Tesco succeeded in enhancing its UK lfl growth, although rather stunted in the Q4. This has sustained its domestic business profitability, improving by 50bp to 1.8% the underlying operating margin. The latter contributed 63% vs. 53% to the group’s underlying operating profit. However, Tesco has taken a total exceptional charge of £235m in respect of the Deferred Prosecution Agreement (DPA) of £129m, the expected costs of the compensation scheme of £85m, and related costs. Thus, the net result came in at £-40m. Net debt decreased to £4.5bn following the lower gross debt and slightly better cash flow generation. However, the balance sheet remains stretched due to the ballooning pension deficit, which more than doubled to £6,621m. It is worth mentioning that the UK defined benefit deficit represents 98% of the group’s deficit. This came after the plunge in bond yields to record lows amidst the deterioration in the UK growth outlook.
Positive H1, delivery of organic growth during integration and confident outlook
31 Jan 17
We flag this morning's announcement and note that the amendment to the interim EPS calculation as announced yesterday in the accounts does not affect our forecasts which remain unchanged. We calculate EPS on a fully diluted basis, and reiterate our EPS forecasts of 20.2p and 23.8p for FY17 and FY18 respectively. Our view remains that the business is considerably undervalued trading on the resultant P/E multiples of 12.6x to March 17 and 10.6x to March 18.