wealthoracle.co.uk/detailed-result-full/CCH/1226 |
Boycott genocide cola :-) |
Same price as it was 8 years ago, pitiful, like everything else listed on the dog index of the world ftse 100. |
Seems like a great stock but surely this would underperform the world index? |
Ill be back in at 2220 |
Trading update today |
I can't believe no one follows this stock here, you cretins! |
Full Year results on the 14, anyone got any ideas? |
Any idea why this drop today please? |
Pop up CCH . 300 nurse to train for GDR new game changer test . Multibagger possible . Anticipated news . |
a very good update in the circumstances IMV, though the full impact of the ukraine invasion is not felt in these numbers (at least €330m in fixed assets invested in russia), and 18% of EBIT.
few consumer staples companies have the customer loyalty and pricing power of soft drinks companies - maybe only tobacco and confectionary that i can think of. people will trade down to own label on many things during these inflationary times - cereal, yoghurt, bread etc, but IMV coca cola will be one of the last things people trade down on.
i'd been waiting for an even more attractive entry price so this update did take me by surprise, but maybe i shouldnt have been.....! |
they have around 14 bottling plants and 70 distribution centres in russia. that's a fair amount of capital tied up there.
it's fully priced in though with the shares down 35% since the invasion. |
Be rude not to at this price |
...........and the stock market rewards this news by going up 7%. |
UPDATE - coca cola have now temporarily suspended operations in russia. |
there's considerable public pressure being pushed on coca cola (KO) to pull out of russia. problem is they can't really make that decision when it's CCH that stand to lose the most out of it, as they have the capital invested in russia, and it affects almost 20% of their revenue and EBIT. morally coca cola (KO) cannot really make that decision to pull out unless they compensate CCH. i expect CCH / KO to update investors in due course as to their stance here. |
due to some fixed costs and operating leverage (manufacturers have quite high fixed costs), losing 20% of your revenue and EBIT will lead to a greater than 20% fall in profits as they'll lose the contribution to fixed costs. they have a number of factories in russia (around 10) and at least one in ukraine. even if russia remains operational, they will presumably face difficulty repatriating any profits due to the sanctions. to be cautious i'd budget for more like a 25-30% fall in profits for the time being.
to illustrate, from 2016-19 revenue increased 4% compound, whereas ebit increased 12% compound. obviously this works the other way should revenue fall.
i'd venture to add that the share price falling 35-40% does at least reflect this disruption to business. |
When Brandon pushes the button he'll be drinking Coke |
Alwaysvalue you called it right! |
 I don't hold here but had a look at the annual report to size up worst case scenario. Page 33 says operating profit about 800m. Of which about 400m is emerging markets. Page 44 says Ukraine, Belarus and Russia are about 40% by volume of emerging markets. I don't see a operating profit breakdown by country but might be there if I had more time to read everything. Assuming those three go to zero and using volume as a proxy for operating profit would give an adjusted emerging market operating profit of about 240m and a total operating profit of about 640m or a 20% overall reduction. Current earnings per share is 1.5 euro (page 2) so that goes to 1.2 euro with a 20% reduction or around a £1 if you want to compare to current share price of about £18. There would need to be other charges for loss of assets and other things so with a wipeout fair value ought to me more than 20% less than before. Also emerging markets are part of the growth story so with those reduced then this should be valued as more a value share and a bit less growth. Of course if you think it will still be possible to get a Coke in Moscow or Kyiv in ten years time and that CCH will have bottled it then it's back to growth. Anyone got a different take on the balance sheet? |
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