POR Portobello

Portobello SpA (POR): Initiation - Scaling to a national presence

Edison Investment Research Limited

13-Apr-2022 / 07:00 GMT/BST

 

London, UK, 13 April 2022

 

Portobello SpA (POR): Initiation - Scaling to a national presence

Portobello's unique business model, primarily the use of media barter, enables it to source branded products at extremely competitive prices for sale, in its own retail outlets and to other distributors in Italy, at a significant discount to its competitors. Management's aspiration is to leverage this competitive advantage to grow its retail operations to national coverage over the long term, which suggests significant potential for new space from its current low market penetration versus its peers. Our discounted cash flow (DCF) based valuation of €121 indicates significant upside potential if Portobello can successfully expand across Italy.

 

Our DCF-based valuation of €121/share represents c 208% upside potential to the current share price. Our growth forecasts for Portobello are significantly higher than consensus expectations for its peers of sales growth of 5-6% in FY22 and FY23, and median EPS growth of 3-10% in FY22 and FY23, as Portobello is a younger company with significant retail space growth potential. Peer group valuation comparison is complicated by Portobello not yet reporting using International Financial Reporting Standards.


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Reports on Portobello

Kate Heseltine
  • Kate Heseltine
POR PORTOBELLO

Portobello SpA - Focus back on the operations

Portobello’s FY23 results demonstrate the primary effects of the out-of-court settlement with respect to VAT and direct taxes (a higher year-end net debt position) and the secondary effects, such as disruption to its trading activities due to management’s focus on cash generation and the company’s inability to trade as previously expected. Following the period end, two capital raises totalling €12.6m, including €3.8m by three of the executive management team, from a maximum mandated amount of €2...

04/24/24 April 24, 2024 1 EN
Kate Heseltine
  • Kate Heseltine
POR PORTOBELLO

Portobello SpA - Focusing on cash generation

Portobello’s (POR’s) H123 results demonstrated strong revenue growth as the store expansion continued against an increasingly challenging macroeconomic backdrop. However, profitability was negatively affected by inflationary cost pressures. The unexpected and unfavourable out-of-court settlement to pay a counterparty’s VAT means POR will focus on cash generation in the near term, allowing its existing store base to mature and pausing the new store opening programme, likely through H124. We reduc...

10/30/23 October 30, 2023 1 EN
Kate Heseltine
  • Kate Heseltine
POR PORTOBELLO

Portobello SpA - Value appeal

Portobello’s management has a very clear strategy to expand its retail presence across Italy over the long term from its current low penetration of 35 stores. It believes the company’s relatively unique business model, the use of its own and third-party media in exchange for inventory, enables it to source products more competitively than its peers. Recent M&A should enable Portobello to shift from a historical land-based focus to an omni-channel presence and enhance its product offer so that it...

06/20/23 June 20, 2023 1 EN
Kate Heseltine
  • Kate Heseltine
POR PORTOBELLO

Portobello SpA - FY22 underlying results ahead of expectations

Portobello’s underlying profitability in FY22 was ahead of our expectations despite the more difficult operating environment affecting revenue growth. Portobello’s multi-distribution model enabled its B2B activities to partially compensate for the slower-than-expected but still strong Retail and Media growth. Our forecasts are under review and will be updated following publication of Portobello’s full financial statements in English.

03/23/23 March 23, 2023 1 EN
Kate Heseltine
  • Kate Heseltine
POR PORTOBELLO

Portobello - Offering value in tough times

Portobello demonstrated strong revenue growth in H122 as it executed its retail-focused expansion strategy. Significantly, given the greater pressures on consumer discretionary income, the more established stores grew on an underlying basis, according to management. It believes the value-based retail offer is well positioned for more difficult economic times. Lower profitability reflects price investment to drive footfall and upfront investment in new trading space. Our operational estimates are...

09/23/22 September 23, 2022 1 EN

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