Staple Retail equity research

Explore the most viewed and latest equity research and media content for companies within the Staple Retail sector. Stocks in this sector provide goods and services in the food wholesale and drug retail industries.

Staple Retail equity research

Explore the most viewed and latest equity research and media content for companies within the Staple Retail sector. Stocks in this sector provide goods and services in the food wholesale and drug retail industries.

Latest Content

Vision of two separate listed companies now a reality

  • 07 Apr 17

Galenica Group released FY16 results broadly in line with market consensus. The reported revenue increased by 8.6% (vs FY15: +11% yoy), largely driven by strong growth momentum in the Vifor Pharma business (+24.8% vs FY15: +36.9%; c.27% of FY16 sales). Within Vifor, the primary growth contributor was Ferinject/Injectafer (+39.3% vs FY15: +33.2%; c.30% of segment sales), led by the robust development in the US and Europe. Sales for Mircera reached CHF328.6m (vs CHF206.8m for seven months in FY15; c.28% of segment sales) on the back of patient share gains in Fresenius Medical Care’s ‘FMC’ dialysis centre. Despite a milder flu season, the Galenica Sante business performed fairly well (+3.2% vs FY15: +3.9%; c.73% of FY16 sales), underpinned by new customer acquisitions and range expansion in the services business (+3.8% vs FY15: +3.4%; c.62% of segment sales). However, growth decelerated in the Health & Beauty ‘H&B’ segment (+3.1% vs FY15: +7.7%; c.38% of segment sales) due to a challenging environment in the Swiss pharmacy market. The EBIT margin slumped by 19.8% (EBIT margin: 8.8% vs FY15: 11.9%), primarily due to the dilutive impact of the Relypsa acquisition (deal completed in September 2016). Net profit (after deduction of minority) was also down 19.1%. The board has proposed a dividend of CHF20 per share (vs FY15: CHF18) for the year. For FY17, management expects Vifor Pharma’ revenue and EBITDA (excluding the launch and ramp-up costs of Veltassa of c.CHF260m) to increase by a high single-digit and mid-to-high single-digit, respectively. Also, the dividend per share is expected to be at the same level until FY19 as FY16 (CHF20 per share). For FY20, Vifor targets revenue in excess of CHF2bn and EBITDA in a high triple-digit range. Moreover, the dividend payout ratio is targeted at 35% of net income. Note that Galenica Group has sold its entire stake in Galenica Sante through an IPO (listing on 7 April 2017). The name of Galenica Group will be changed to ‘Vifor Pharma Group’ post shareholders’ approval at the AGM in May 2017.

Breakfast Today

  • 17 Mar 17

Following Thursday’s celebrations, confidence flagged somewhat in the overnight markets. European and Asian equities had raced higher yesterday on the back of a more dovish than expected tone from Janet Yellen, a recovery in mineral/commodity prices and a firm rejection of populism from the Dutch election. The Stoxx Europe 600 rose 0.7% to its highest close since December 2015, led by mining and oil companies, while the internationally-traded Hang Seng spiked back to levels not seen for two summers. By mid-afternoon, however, the US$ had retreated on slower rate-increase expectations, as Donald Trump revealed plans to slash environmental and foreign aid budgets to fund increased military spending. In his first budget, the President outlined proposals to cut more than US$10bn from the Department of State and USAID, an agency which works to fight poverty across the globe. His ‘America First’ draft meanwhile set aside US$639bn for the Department of Defense, a US$52bn year-on-year increase and the largest since Ronald Reagan was in office, while trimming the Department of Health and Human Services' funding by 18% (US$15.1bn) and education by 13% (US$9bn). These big numbers rather took the puff out of US equities, as analysts pointed to the Health-care sector as the obvious loser given increased expectation of higher regulatory costs and cuts in federal funding, while Energy stocks also suffered as US crude prices retreated below US$50 once again. This meant the three principal US equity indices ended fractionally mixed after a rather anticlimactic session as Treasury Secretary, Steve Mnuchin, insisted the Trump Administration did not want a trade war but was determined to rebalance unfair international trading relationships. Investors may hear more from him on this later today, when he attends a gathering of the world’s G20 finance chiefs. Asian equities ended similarly mixed with mostly just small moves, as traders foresaw new pressure from Mnuchin to boost the value of what his President considers deeply unvalued currencies. Yesterday was also the Bank of England’s turn to surprise a little. Not that it changed its base rate, but the fact that one official dissented in favour of higher borrowing costs while others hinted it might not be long before they do the same. This unexpectedly hawkish signal comes as Theresa May prepares to trigger divorce talks by the end of this month, while inflation is almost certain to breach the BoE’s target 2% level in the first half and possibly exceed its projected 2.4% peak in the second. That said, market consensus remains for no change to UK rates throughout 2017 while sensitive Brexit negotiations get underway, even if it was enough to see the Pound recover a little and Gilt yields rise. UK macro releases due today are limited to the BoE Quarterly Bulletin, while the EU produces January Trade Balance and Construction Output figures. The US is scheduled to release Industrial Production, Capacity Utilisation and the Michigan Consumer Sentiment Index. UK Corporates due to report earnings or trading updates include Sthree, Berkeley Group, Goodwin and Investec. Traders will also be listening out for any feedback from the meeting scheduled for President Trump and Chancellor Merkel in the company of various of Germany’s industry giants; the US$65bn trade deficit and apparently engineered weakness of the Euro will likely be the focus points. Such a mixed bag of sentiment drivers is likely to mean London equities open unconvincingly this morning, with the FTSE-100 giving back some of yesterday’s gains after having rallyied to a new record close. The index is seen down 10 points in opening trade.

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