Tuesday, 21 May 2013 - 20:00
Charts
Richemont ? Against the Tide Compagnie Financière Richemont (Richemont) is one of the world’s top luxury goods groups, with several prestigious brands in its stable and access to markets around the world. In addition to managing its existing portfolio of brands, Richemont also endeavours to identify and acquire lesser-known brands in order to build them up over the long term. The company’s overall growth strategy envisions that each brand should be established in its own right by the development of competitive products and effective marketing programmes.
Richemont has its headquarters in Switzerland, and its listing on the JSE is courtesy of the company’s long-standing link to the Rupert family. The company was created in 1988 when all the international assets owned by the Rembrandt Group were spun off into a separate entity. Richemont then had direct holdings in Cartier Monde and Rothmans, and indirect holdings in Alfred Dunhill, Montblanc, and Chloé. Over the next 20 years Richemont acquired various direct and indirect stakes in Purdey, Vacheron Constantin, Van Cleef & Arpels, Jaeger-LeCoultre, IWC, and A. Lange & Söhne, amongst others. In 2008, Richemont restructured and Reinet Investments was formed as a separately traded vehicle to hold all the non-luxury goods businesses.
Recent results
Richemont released an impressive set of annual results for FY13 last week, and the market reacted positively with the share price jumping up 8% in a single day. These results were largely driven by an increase in sales, once again proving that economic uncertainty around the world has little effect on the appetite for luxury products.
Richemont reported an increase in sales of 14% to € 10.15b, which amounts to a 9% increase on a constant currency basis. With sales around the globe, varying exchange rates have a huge influence, and in FY13 the company was favoured by a weak Euro. The Group’s solid sales growth across all product segments and regions was mostly the result of growth in the company’s own retail network.
Sales growth in Europe (incl. Middle East and Africa) was especially strong at 17%, and was driven by increasing tourism from Asia and a weaker Euro. Growth in sales in Asia Pacific has slowed down considerably from figures of +36% in FY11 and +45% in FY12 to only +5% in FY13 on a constant currency basis.
When examining sales by product line, it is clear that the larger lines – Watches, Jewellery and Clothing – show strong growth, while the smaller lines are struggling.
Operating profit increased by 18% for the period, and the impressive operating margin was extended by a further 80 basis points to 23.9%.
Operating expenses increased in line with sales at 14%, with the company unable to curb selling, distribution, and administration expenses. Profit for the year and diluted earnings per share both increased by 30%, mostly due to non-cash charges related to the strengthening of the Swiss franc not recurring in FY13.
Richemont has increased its capital expenditure by 27% to € 612m, which is 6% of sales, with an increasing weight given to manufacturing compared to the previous year. The company’s balance sheet remains very healthy, with 17% of the assets available in cash to back any potential acquisitions.
A generous dividend of 1.00 CHF was declared, up 82% from last year’s 0.55 CHF, in order to celebrate 25 years of Richemont and to demonstrate management’s intention to grow dividends steadily over the long term.
Current Valuation
The Richemont share price has increased by 70% over the past year, with last week’s jump contributing to 26% growth in the last 30 days alone. At a PE of about 22 the share is a bit more expensive than the market, and the dividend yield of 1.13% is not that attractive compared to other Industrial shares. A low dividend yield for an investment holding company can be seen as encouraging, as management can potentially make better use of cash through acquisitions than paying it out to shareholders.
This share offers an opportunity for local investors to gain international exposure quite easily, and the appeal of Richemont’s products throughout economic cycles will ensure that these investors remain content.
The Seed Equity Fund, which blends a Value and Momentum portfolio, has an exposure of 2.3% to Richemont as part of the Momentum portfolio.
Kind regards,
Cor van Deventer
Source: www.richemont.com
www.seedinvestments.com
info@seedinvestments.co.za
021 914 4966
Tue, 21 May 2013
Top News
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South Africa's rand lost further ground against the dollar on Tuesday, slumping for the ninth straight session, amid an escalation in labour unrest ahead of mid-year wage talks . Full story |
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Markets | Stock markets around the world
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| Gold, down in seven of its last
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gains on Wall Street.. . . Full story | | U.S. stocks opened slightly
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SA Business | A two-day wildcat strike at a Mercedes Benz plant in South Africa ended on Tuesday but industrial union NUMSA demanded a hefty pay hike for the sector, raising the prospect of. . . Full story | | South Africa's JSE Top-40 blue-chip index hit a lifetime high on Tuesday as a weaker rand currency at helped boost some exporters such as Anglo American and Kumba Iron Ore.. . . Full story | | Kenya's CFC Stanbic Bank posted a 79.5 percent jump in pretax profit for the first quarter from a year ago to 1.46 billion shillings.. . . Full story |
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| A sharp fall in the rand against the dollar to a four-year low on Tuesday was a "bit of an over-reaction",. . . Full story | | South Africa's chronic unemployment problem is likely to get worse and investor confidence will deteriorate if the country does not sort. . . Full story | | South Africa's rand tumbled for the ninth straight session on Tuesday after industrial union NUMSA demanded a hefty pay hike for. . . Full story | | The South African Reserve Bank's monthly leading business cycle indicator fell 1.1 percent in March from February, mainly due to a. . . Full story |
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| A two-day wildcat strike at a Mercedes Benz car plant in South Africa ended on Tuesday but industrial union NUMSA demanded a hefty pay hike for the sector, raising the prospect of manufacturing unrest alongside turmoil in the mines.. . . Full story | | The National Union of Metal Workers of South Africa (NUMSA) is demanding a 20 percent wage increase for its members in the automotive sector, the union's treasurer said on Tuesday.. . . Full story |
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Company Results | Revenue for the year ended 28 February 2013 increased to R1 billion (2012: R965.8 million). Earnings before interest, taxation, depreciation and. . . Full story | | Revenue for the interim period increased to R31.3 billion (2012: R28.1 billion). Operating profit rose to R1.5 billion (2012: R1.3 billion),. . . Full story | | Revenue for the interim period increased to R10.2 billion (R9.2 billion). Operating profit rose to R512.8 million (R465.1 million). Profit attributable. . . Full story | | Revenue for the year increased to R69.9 billion (2012: R66.9 billion), operating profit rose to R18.9 billion (2013: R16.6 billion), while. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 41815.36 | 735.81 | 1.79% | JSE Top 40 | 17:00 | 37302.58 | 757.40 | 2.07% | JSE Gold | 17:00 | 1340.29 | 21.65 | 1.64% | JSE Financial | 17:00 | 32083.18 | 366.45 | 1.16% | JSE Industrial | 17:00 | 54309.44 | 684.20 | 1.28% | JSE Indust 25 | 17:00 | 47656.81 | 690.16 | 1.47% | JSE Resource | 17:00 | 47000.85 | 1554.99 | 3.42% | DJ Futures | 19:12 | 13496.43 | -1822.57 | -11.90% | DJ Ind | 19:58 | 15411.61 | 76.33 | 0.50% | SP 500 | 19:58 | 1672.80 | 6.51 | 0.39% | Nasdaq | 19:58 | 3508.23 | 11.80 | 0.34% | FTSE 100 | 17:35 | 6803.87 | 32.57 | 0.48% | DAX | 18:12 | 8472.20 | 16.37 | 0.19% | CAC40 | 18:12 | 4036.18 | 13.33 | 0.33% | Nikkei | 08:34 | 15381.02 | 20.21 | 0.13% | Shanghai | 09:34 | 2305.11 | 5.13 | 0.22% | Hang-Seng | 10:28 | 23366.37 | -126.66 | -0.54% | All Ords | 09:01 | 5156.20 | -29.20 | -0.56% | NZSE 50 | 07:48 | 4590.84 | -7.82 | -0.17% |
| | Name | Time | RP | Move | % Move | Gold $ | 19:57 | 1376.71 | -16.68 | -1.20% | Gold R | 19:58 | 13138.34 | -10.23 | -0.08% | Gold R/kg | 19:58 | 422327 | 11349 | 2.76% | Silver $ | 19:59 | 22.4820 | -.4220 | -1.84% | Platinum $ | 19:59 | 1459.00 | -31.00 | -2.08% | Palladium $ | 19:59 | 746.20 | -1.10 | -0.15% | R157 | 08:58 | .00 | -5.11 | ######% | R186 | 14:37 | .00 | -6.94 | ######% | R204 | 08:58 | .00 | -5.73 | ######% | R207 | 08:58 | .00 | -5.98 | ######% | Brent Crude | 19:50 | 104.27 | -.37 | -0.35% | Rand / Dollar | 19:59 | 9.5500 | 0.1147 | 1.22% | Rand / Pound | 19:55 | 14.4366 | 0.0648 | 0.45% | Rand / Euro | 19:55 | 12.3167 | 0.1566 | 1.29% | Rand / NZD | 19:58 | 7.8082 | 0.0939 | 1.22% | Rand / AUD | 19:55 | 9.3723 | 0.1120 | 1.21% | Yen / Dollar | 19:59 | 102.5700 | 0.3050 | 0.30% | Euro / Dollar | 19:55 | 0.7745 | -0.0014 | -0.18% | Dollar / Euro | 19:59 | 1.2904 | 0.0020 | 0.15% | Pound / Dollar | 19:55 | 0.6594 | 0.0043 | 0.66% |
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The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
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21/05/2013 | 231 | 139 | 72 | 442 | 295,476,697 | R17,646,320,554 | 208784 | 1510170 | 20/05/2013 | 123 | 222 | 81 | 426 | 295,353,182 | R15,922,965,580 | 213739 | 1412530 | 17/05/2013 | 204 | 168 | 76 | 448 | 246,220,952 | R13,164,532,835 | 166614 | 1496215 | 16/05/2013 | 207 | 165 | 69 | 441 | 280,251,447 | R16,684,182,240 | 200866 | 1469676 | 15/05/2013 | 195 | 160 | 80 | 435 | 219,838,566 | R13,687,955,865 | 176882 | 1474251 |
* Includes all listed instruments on the JSE
Index Summary Index Name | RP | Move | % Move | Top 40 | 37,302.00 | 757.00 | 2.07% | Industrial | 54,309.00 | 684.00 | 1.28% | Mid Cap | 56,080.00 | 270.00 | 0.48% | Small Cap | 45,324.00 | 89.00 | 0.20% | Resource 20 | 47,000.00 | 1555.00 | 3.42% | Industrial 25 | 47,656.00 | 690.00 | 1.47% | Financial 15 | 12,000.00 | 168.00 | 1.43% | Financial & Ind. 30 | 50,989.00 | 747.00 | 1.49% | All Share | 41,815.00 | 736.00 | 1.79% | Oil & Gas | 32,237.00 | 789.00 | 2.51% | Mining | 28,705.00 | 966.00 | 3.48% | Gold Mining | 1,340.00 | 22.00 | 1.69% | Platinum Mining | 37.00 | .00 | 1.73% | GENERAL MINING | 8,333.00 | 317.00 | 3.96% | Oil & Gas Producers | 17,333.00 | 424.00 | 2.51% | Basic Materials | 25,271.00 | 802.00 | 3.28% | Chemicals | 20,160.00 | 189.00 | 0.95% | Forestry & Paper | 22,146.00 | 293.00 | 1.34% | Industrial Metals | 25,875.00 | 642.00 | 2.55% | Industrials | 42,747.00 | 165.00 | 0.39% | General Industrials | 130.00 | 1.00 | 1.20% | Consumer Goods | 51,568.00 | 503.00 | 0.99% | Automobiles & Parts | 8,140.00 | 16.00 | 0.21% | Household Goods | 155.00 | 3 | 2.09% | Health Care | 66,882.00 | 971.00 | 1.47% | Beverages | 174.00 | -1.00 | -0.57% |
| | Index Name | RP | Move | % Move | Food Producers | 70,700.00 | -430.00 | -0.60% | Personal Goods | 901.00 | 37.00 | 4.37% | Consumer Services | 90,146.00 | 1750.00 | 1.98% | General Retailers | 63,281.00 | 243.00 | 0.39% | Travel & Leisure | 5,331.00 | -77.00 | -1.43% | Media | 162.00 | 6.00 | 4.47% | Support Services | 2,325.00 | -29.00 | -1.24% | Telecommunications | 87,012.00 | 1435.00 | 1.68% | Financials | 32,083.00 | 367.00 | 1.16% | Banks | 51,670.00 | 1164.00 | 2.31% | Non-life Insurance | 50,151.00 | 302.00 | 0.61% | Life Insurance | 31,036.00 | 410.00 | 1.34% | General Financial | 2,841.00 | 38.00 | 1.36% | Technology | 39,506.00 | 381.00 | 0.97% | SHARIAH TOP40 | 3,443.00 | 102 | 3.07% | FTSE/JSE SHARIAH ALL | 3,561.00 | 92 | 2.68% | COAL MINING | 18,318.00 | 395 | 2.21% | FTSE JSE Fledgling | 5,779.00 | -5 | -0.10% | FTSE/JSE Alt X | 997.00 | 0 | -0.02% | SA LISTED PROPERTY | 573.00 | | -1.40% | CAPPED PROPERTY | 466.00 | | -0.48% | RESOURCE | 25,590.00 | 822 | 3.32% | DIVIDEND PLUS | 209.00 | 2 | 1.05% | FTSE/JSE RAFI 40 | 8,243.00 | 152 | 1.89% | Capped Top 40 | 19,694.00 | 393 | 2.04% | Capped All Share | 21,173.00 | 365 | 1.76% | JSE TABACO | 6,962.00 | 22 | 0.32% |
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Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | TBS | TIGER BRANDS LTD | HOLD | 20/05/2013 | MDC | MEDICLINIC INTERNATIONAL | BUY | 20/05/2013 | LHC | LIFE HEALTHCARE GRP HLDG ... | HOLD | 17/05/2013 | SAB | SABMILLER PLC | HOLD | 17/05/2013 | PPC | PRETORIA PORT CEMNT | HOLD | 17/05/2013 |
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Results Expected** Expected | Company Name | Fin. Date | 22/05/2013 | DELRAND | March 2013 (Q) | 22/05/2013 | MEDCLIN | March 2013 (Final) | 22/05/2013 | MRPRICE | March 2013 (Final) | 22/05/2013 | MRPROB | March 2013 (Final) | 22/05/2013 | PRICEP | March 2013 (Final) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | ABIL PREF | 20/05/2013 | 07/06/2013 | 18/06/2013 | R 3.2200 | NETCARE | 20/05/2013 | 19/07/2013 | 29/07/2013 | R 0.2700 | PNR FOODS | 20/05/2013 | 28/06/2013 | 08/07/2013 | R 0.4600 | VODACOM | 20/05/2013 | 21/06/2013 | 01/07/2013 | R 4.3000 | BARWORLD | 20/05/2013 | 07/06/2013 | 18/06/2013 | R 0.9600 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | JSE | 12/03/2013 | 17/05/2013 | 27/05/2013 | R 2.5000 | REDEFINE | 02/05/2013 | 17/05/2013 | 27/05/2013 | R 0.3370 | HOWDEN | 08/03/2013 | 17/05/2013 | 27/05/2013 | R 0.3000 | PHUMELELA | 11/04/2013 | 17/05/2013 | 27/05/2013 | R 0.2800 | DELPROP | 06/05/2013 | 17/05/2013 | 27/05/2013 | R 0.2369 |
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Upcoming AGMs** Code | Company Name | Date | Status | BRT | Brimstone Investment Corporation Ltd. | 22/05/2013 | Confirmed | MSMX | Massmart Holdings Ltd. | 22/05/2013 | Confirmed | MSM | Massmart Holdings Ltd. | 22/05/2013 | Confirmed | BRN | Brimstone Investment Corporation Ltd. | 22/05/2013 | Confirmed | ILAA | Iliad Africa Ltd. | 23/05/2013 | Confirmed |
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