Rebranded with a BiG long-term plan
Belvedere has been rebranded as Marie Brizard Wine & Spirits (PA:MBWS), with an enhanced board, powerful shareholders and ambitious growth plans. Having risen 84% ytd, the shares now trade at a P/E of c 33x 2016e and c 17x 2017e. The investment case is focused on the long-term strategy, where EPS upgrades could be triggered by a new BiG 2.0 plan. A definitive exit from administration would also be an important step forward.
Exiting administration…
Following a breach of covenant in 2008, MBWS has undergone significant debt restructuring (€530m), resulting in heavy equity dilution in 2013. Although its difficulties with creditors now appear to be minimal (only €74m outstanding), MBWS continues to operate under administration. Exiting this status would clearly be beneficial and management hopes to achieve this in the coming months.
…with a BiG 2018 plan…
A new management team has been in place since 2014 and is currently implementing a four-year BiG 2018 target (Back in the Game by 2018). This includes growing the core business by 25-35% and bringing EBITDA margins to 12-15%. The group aims to achieve sales of €420-460m and EBITDA of €50-70m by 2018. The three key pillars of the plan are (1) asset rationalisation – disposing of unprofitable businesses and non-strategic assets; (2) optimisation of production, sourcing, distribution and sales; and (3) the development of flagship brands.
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