Smurfit Kappa Group (SKG)

Sector:

Manufacturing

Index:

FTSE 100

2,716.00p
   
  • Change Today:
    -4.00p
  • 52 Week High: 2,761.44p
  • 52 Week Low: 1,934.00p
  • Currency: UK Pounds
  • Shares Issued: 237.87m
  • Volume: 124,525
  • Market Cap: £6,461m
  • RiskGrade: 147
  • Beta: 1.85

Smurfit Kappa shows confidence in outlook by raising dividend, analysts say

By Alexander Bueso

Date: Wednesday 31 Jul 2019

LONDON (ShareCast) - (Sharecast News) - Smurfit Kappa posted a solid increase in half year sales and profits and announced an increased dividend payout on the back of continued "strong" growth in Europe and a good performance in the Americas.
For the six months ending on 30 June, the maker of corrugated and paper-based packaging reported a 8.0% rise in revenues to €4.62bn, alongside improved margins at the earnings before interest, tax, interest, depreciation and amortisation level from 16.4% to 18.3%.

EBITDA was up 17.0% to €847.0m (consensus: €838.0m).

That drove a 9.0% jump in profits before tax to €456.0m with earnings per share ahead by 13.0% to 140.6 euro cents.

Free cash flow meanwhile grew by approximately 8.0% to hit €159.0m and the company's return on capital employed improved from 18.1% to 18.7%.

Despite that, net debt rose from €2.871m to €3.751 - with an average maturity of 4.2 years - following acquisitions made in Bulgaria, Colombia and Serbia, as well as by the adoption of accounting directive IFRS 16.

The interim payout was hiked by 10.0% to 27.9 euro cents.

As at period end, the group had €247.0m of cash on hand and available commitments under its new revolving credit facility of roughly €1.13bn.

In terms of the outlook, group chief executive officer, Tony Smurfit said: "While macro-economic and political risks remain, SKG continues to be highly confident of another year of progress and delivery."

For their part, analysts at Jefferies reiterated their 'buy' recommendation for the shares following the company's latest update.

Although their 2020 estimates were roughly 3.0% below consensus, the shares were sporting about a 4.0% dividend yield and were trading on an enterprise value-to-EBITDA (excluding pensions) of 6.5 times, for a modest discount relative to the sector, they said.

"Given flexibility, if capex declines to in-line with depreciation (from elevated c.130%-140%) in FY20-21E then SKG on our forecasts would generate €600-700m p.a FCF (double the

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

SKG Market Data

Currency UK Pounds
Share Price 2,716.00p
Change Today -4.00p
% Change -0.15 %
52 Week High 2,761.44p
52 Week Low 1,934.00p
Volume 124,525
Shares Issued 237.87m
Market Cap £6,461m
Beta 1.85
RiskGrade 147

SKG Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
16.89% below the market average16.89% below the market average16.89% below the market average16.89% below the market average16.89% below the market average
6.67% above the sector average6.67% above the sector average6.67% above the sector average6.67% above the sector average6.67% above the sector average
Price Trend
83.61% above the market average83.61% above the market average83.61% above the market average83.61% above the market average83.61% above the market average
100.00% above the sector average100.00% above the sector average100.00% above the sector average100.00% above the sector average100.00% above the sector average
Income
47.92% below the market average47.92% below the market average47.92% below the market average47.92% below the market average47.92% below the market average
16.67% below the sector average16.67% below the sector average16.67% below the sector average16.67% below the sector average16.67% below the sector average
Growth
66.87% below the market average66.87% below the market average66.87% below the market average66.87% below the market average66.87% below the market average
60% below the sector average60% below the sector average60% below the sector average60% below the sector average60% below the sector average

What The Brokers Say

Strong Buy 8
Buy 1
Neutral 2
Sell 0
Strong Sell 0
Total 11
strong_buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

SKG Dividends

  Latest Previous
  Interim Final
Ex-Div 26-Sep-19 11-Apr-19
Paid 25-Oct-19 10-May-19
Amount 27.90¢ 72.20¢

Trades for 15-Nov-2019

Time Volume / Share Price
13:35 30 @ 2,716.00p
13:35 200 @ 2,716.00p
13:28 29 @ 2,712.00p
13:28 98 @ 2,712.00p
13:24 91 @ 2,708.00p

SKG Key Personnel

CEO Tony Smurfit

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