Moy Park stock market flotation confirmed for 2015
The group, which hopes the move will raise cash to reduce its debts, first announced it was exploring the possible initial public offering (IPO) in fourth quarter results for 2013.
Brazil-based Marfrig reported that Moy Park grew net revenue by 10% in the quarter over the prior year period with the domestic business also winning market share.
Several factors lay behind this performance, including lower feed costs for cattle, the consolidation of Marfrig’s European beef business creating incremental volumes, and positive currency exchange rates, said Shore Capital analyst Phil Carroll.
Moy Park’s volume sales had grown by 2% in the UK and Ireland, according to Marfrig, led by fresh product sales through retailers.
Sales growth
Ready-to-eat and frozen coated products had also driven sales growth in convenience channels, said Carroll. “We believe this is a robust performance given the challenges in the UK and Irish food retail market.”
However, he added: “Outside its domestic market, there was a modest decline in European volumes reflecting lower promotional activity and fragile consumer confidence in France.”
In addition to modest sales growth, pre-tax profit at Moy Park rose by 24% in Q3, powered by investment in its Grantham operations, which was boosting production and labour cost efficiency, said Carroll. Again, he believed lower feed costs had played a role.
‘Strong trading momentum’
“We expect Moy Park to continue its strong trading momentum in the seasonally stronger Q4 period with the benefit of turkey sales in the run up to Christmas,” Carroll concluded.
“We also expect margins to continue to benefit from lower grain costs and further cost efficiency in relation to production and labour costs. We should add that we also expect that the business’ ongoing approach to innovation and high levels of customer service should provide it with an ongoing attractive product offering going forward.”
Moy Park grew net revenue from 1.2bn Brazilian Real (£300.4M) in Q3, 2013, to 1.3bn Brazilian Real (£330.5M) in the same period this year and adjusted pre-tax profit from 77.6M Brazilian Real (£19.1M) to 95.9M Brazilian Real (£23.6M).
