IC group
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Hi!
What do you think about the report tomorrow? The sales for clothes have been outstanding for the scandinavian countries in June and July, due to the bad weather were people went to shopping malls instead of laying on the beach.
The latest numbers for retails came today, sweden had an increase of 12% for July. June was also a good month in Sweden, compared to june last year. Since IC have their major part of the business in scandinavia this might be a good bet for the tomorrows report.
I calculated a bit on the stock level and the estimated numbers (2600m revenue), and the stock should probably be around 180 if the estimated numbers are met, which doesnt take into account the strong summer in scandinavia.Risk are as I see it, the currency and the rubbish market in China which can turn the whole market upside down and then it doesnt matter how good or bad the report is.
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Ok, give me the call! The revenue is in the upper part of the estimated values. Earnings per share is increased twith 30% to 4kr. Strong increase of free cash flow to almost 250m DKK. EBIT on 270 where the expectations where 215-255.
The new estimated values for 2015/2016 is EBIT margin of 10%
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The result is in line with expectations. The dividend is 4 DKK, while EPS is 8,5 DKK (P/E 19,6 at current price 167 DKK).
EBIT margin is going to increase going forward as cost reductions of 35-40 m. DKK are realized from 2015/16. With no net debt and a strong cash flow they expect to pay an extraordinary dividend of 75 m. DKK in 2015/16.
If 'Tiger of Sweden' will be succesful in US the valuation could be very attractive. Currently 82% of revenue from that brand is from Scandinavia, so there could be potential.
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Danske Bank opjusterer IC: https://www-2.danskebank.dk/Link/EquityComment030915
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