GBL 1H FY24: Exceptional Dividend Thanks To Trimming Adidas Stake
NAVps remained flat at €113.9 (vs. €113.6 during FY23-end). What surprised us was the management's decision to payout a dividend of €5.0ps, up 82% YoY. The massive uptick in dividend payment is possible thanks to the €630.0 cap. gains which came from decreasing the stake in Adidas from 7.6% to 5.1% (€999.0m proceeds). Given that GBL materially trimmed its position in Adidas and has entered into a forward contract to sell another €250.0m, we feel that, over the medium term, the stake in Adidas and other listed assets will be trimmed as management continues to crystallise value and shift to a higher private allocation. Since FY19 (excl. FY22), Adidas has contributed to approximately 9-10% of cash earnings. Also, GBL announced a strategic update to be held right after Q3 results on 7th Nov'24 during which we feel that mgmt. might announce a higher future allocation to private assets (above the current 40.0% target). We currently estimate NAVps and TEVp to be €118.2 and €133.0 respectively, implying discounts of 41.5% and 48.0% respectively. We reiterate our BUY rating & €100.0 TP.Groupe Bruxelles Lambert is a holding company. Through its subsidiaries, Co. operates through the following segments: Imerys, which consists of the Imerys group that operates in four business lines of energy solutions and specialties, filtration and performance additives, ceramic materials, and high resistance minerals; and Financial Pillar, which includes, on the one hand, under investment activities, the companies Sienna Capital, Ergon Capital Partners (ECP), ECP II, ECP III, PAI Europe III, Sagard, Sagard II and Sagard III, Kartesia and Merieux Participations I and II and, on the other hand, under consolidated operating activities, the operating subsidiaries of ECP III.
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