La Doria - Investing for the future

The environment remains challenging, but La Doria has posted a robust set of FY17 results. The company has announced its updated three-year rolling industrial plan, and as part of this there will be a major investment plan to expand capacity while streamlining the business to reduce costs. The result should be an expansion of the higher margin lines, allowing the company to drive revenue growth by increasing volumes, while also structurally improving margins in the longer term. We adjust our for...

Outlook: Weathering the storm

Following a tough tomato campaign in 2015, La Doria management has kept costs under control and delivered another quarter of results in line with expectations. The overarching strategy of shifting the production mix towards non-seasonal, value-added products with higher operating margins and lower volatility is paying off. La Doria continues to trade at a significant discount to its peers, and our DCF value of €15.84 (unchanged) suggests 26% upside to the share price.

Update: Another strong year

La Doria has reported yet another strong set of results. The updated three-year plan provides strategic continuity. As previously highlighted, due to the unfounded fears of tomato overproduction at the start of the campaign, lower sales prices were achieved for new contracts. Following the FY results and updated business plan, we have cut our sales forecasts to reflect the lower 2016 base, left our EBITDA forecasts broadly unchanged, and increased our PBT and net profit estimates in line with th...

Update: Another strong quarter

La Doria reported another set of strong results. Its overarching objective is to reduce the volatility of the business and to improve visibility. To that end, the acquisition of Pa.fi.al is strategically very helpful. As disclosed at the H1 results, fears of an abundant tomato crop in the early part of the campaign resulted in lower sales prices being achieved for new contracts, and hence 2016 is likely to see a small reduction in EBITDA. We are leaving our forecasts unchanged.

Update: Acquisition bearing fruit

Another excellent set of results confirms La Doria’s strategy is on track: the group is delivering on its overarching objective to reduce the volatility of the business and improve visibility. The Pa.fi.al business is being fully integrated and continues to perform well. The hot summer in Italy resulted in fears of an abundant tomato processing campaign, hence we now forecast a fall in sales in 2016, although lower costs should mitigate the EBITDA impact.

Outlook: A winning combination

La Doria reported yet another strong set of results despite the tough economic and trading environment in its markets. Despite the recent strength of the share price, we still calculate c 25% upside on DCF analysis. The acquisition of Pa.fi.al is already bearing fruit, and we expect it to drive further improvement in top-line growth and margin over the next few years.

Update: Continuing to beat expectations

La Doria has reported yet another strong set of results despite the tough economic and trading environment in its markets, and the updated three-year plan represents a further upgrade to forecasts. Despite the very strong run in the share price, we still calculate c 17% upside on our DCF analysis. As a result of the FY results, we have upgraded our earnings forecasts for 2015 by c 27% as we have incorporated the recent acquisition of Pa.fi.al. In underlying terms, we have upgraded our forecasts ...

Institutional Comment: Daily comment

Outlook: An increasingly healthy outlook

La Doria’s share price is up 72% since we initiated coverage in December 2013. Despite this, we still calculate double-digit upside on both DCF and benchmark analysis. As a result of its very strong nine-month results reported on 13 November, we have upgraded our earnings forecasts for 2014-16 by c 6%, although we highlight that this does not yet reflect the recent acquisition of Pa.fi.al. Srl Group (Pfa), which we expect to be double-digit earnings accretive in its first full year.

Flash note: Strategic and financially positive acquisition

La Doria has announced the acquisition of Pa.fi.al. Group for a consideration of €65.2m, representing 7.0 EV/EBITDA based on budgeted 2014 figures. The acquisition makes La Doria the leading Italian producer of private-label ready-made sauces, extending its exposure to higher value-added, higher-margin business segments. The acquisition is 60% debt funded and 40% funded from existing liquidity, and we calculate immediately low double-digit earnings enhancing (pre synergies). Completion is expe...

Institutional Comment: Daily comment

Update: An excellent start to the year

La Doria has announced H114 results ahead of budget and reflecting a significant improvement on H113. Although the company is not upgrading guidance for 2014 and beyond at this stage due to the relative importance of Q3 to the FY14 and FY15 results, we believe that forecast risk is to the upside. Our DCF values the shares at €7.80, an attractive 22% upside.