Arqaam Capital - Pioneer Food Group Limited (16PP) Pioneer Foods - H1 17e weak trading update drives 7% FY 17e HEPS cut

Report

Arqaam Capital

Victor Dima

EUR 36.48 For Business Accounts Only

Pioneer Foods - H1 17e weak trading update drives 7% FY 17e HEPS cut

We cut our FY 17e HEPS forecast by c.7% and H1 17e HEPS by c.20% post the weak H1 17e trading update by PFG.

PFG H1 17e trading update guides for H1 17e HEPS at ZAR 2.78 - 3.45/share; 38%-55% y/y lower than H1 16A HEPS of ZAR 5.56/share on one-off higher priced procurement position of maize.

We leave our H2 17e and FY 18e estimates unchanged and maintain BUY, though we shave our TP by 2% to ZAR 183/share from ZAR 186/share.

22/02/2017 9 EN

Underlying

Pioneer Food Group Limited

Pioneer Food Group is a Fast Moving Consumer Goods (FMCG) group based in South Africa. Co. is engaged in the manufacturing of food, beverages and related products for human and animal consumption. Co.'s operations are organized along three main divisions: Essential Foods (wheat and maize products, trades in rice, beans, lentils and dried vegetables); Groceries (cereals, rusks, biscuits, cake mixes, baking aids, instant mash potato, dried fruit products, nuts, spreads, dehydrated vegetables, salads, fruit juices, carbonated soft drinks and fruit concentrate mixture); and Pioneer Foods (tomato sauces and ketchup, frozen foods, seafood tinned products, tinned food, instant meals and noodles).

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ZAE000118279 South Africa

Provider

Arqaam Capital

Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa.

Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research.

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Analysts

Victor Dima

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