La Doria: A Challenging Environment With Storm Clouds Ahead
Edison | Oct 05, 2016 05:33AM ET
Following an exceptionally strong FY15, H1 16 brought La Doria (LON:LDOEUR) a perfect storm of a weak macroeconomic backdrop in many end-markets, sterling devaluation, a weak tomato campaign and higher fruit and pulse costs. Management has therefore updated its rolling three-year plan for the more challenging environment and revised down estimates. Our DCF-derived fair value moves to €10.91/share (from €15.84) given the downgrades to estimates.
Challenging H1 results and storm clouds ahead
H1 results were characterised by generally lower sales prices across all products with the exception of the fruit line, lower volumes for the sauces and juices segments (stable volumes for other categories) and sterling devaluation. The outlook is challenging, as the macroeconomic environment remains tough, with deflation in a number of markets. This will have an effect on operating leverage, as the reduction in selling prices will not be fully offset by the reduction in production costs. Sterling devaluation will also take its toll as 50% of revenues stem from the UK business, but most costs are euro and US dollar-denominated.
To read the entire report Please click on the pdf File Below
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.