Smurfit Kappa Group (SKG)

Sector:

Manufacturing

Index:

FTSE 100

2,724.00p
   
  • Change Today:
      24.00p
  • 52 Week High: 3,010.00
  • 52 Week Low: 1,944.00
  • Currency: UK Pounds
  • Shares Issued: 238.57m
  • Volume: 431,089
  • Market Cap: £6,498m
  • RiskGrade: 193

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 2,724.00p
Change Today 24.00p
% Change 0.89 %
52 Week High 3,010.00
52 Week Low 1,944.00
Volume 431,089
Shares Issued 238.57m
Market Cap £6,498m
RiskGrade 193

SKG Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
25.57% below the market average25.57% below the market average25.57% below the market average25.57% below the market average25.57% below the market average
20% below the sector average20% below the sector average20% below the sector average20% below the sector average20% below the sector average
Price Trend
21.19% above the market average21.19% above the market average21.19% above the market average21.19% above the market average21.19% above 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
Income
56.42% above the market average56.42% above the market average56.42% above the market average56.42% above the market average56.42% above the market average
38.46% above the sector average38.46% above the sector average38.46% above the sector average38.46% above the sector average38.46% above the sector average
Growth
45.16% below the market average45.16% below the market average45.16% below the market average45.16% below the market average45.16% below the market average
20% below the sector average20% below the sector average20% below the sector average20% below the sector average20% below the sector average

What The Brokers Say

Strong Buy 8
Buy 0
Neutral 1
Sell 0
Strong Sell 0
Total 9
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 Interim
Ex-Div 13-Aug-20 26-Sep-19
Paid 11-Sep-20 25-Oct-19
Amount 80.90¢ 27.90¢

Trades for 14-Aug-2020

Time Volume / Share Price
17:11 1,000 @ 2,730.48p
16:35 40,877 @ 2,724.00p
16:29 3 @ 2,742.00p
16:29 28 @ 2,742.00p
16:29 121 @ 2,742.00p

SKG Key Personnel

CEO Tony Smurfit

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