UK: S&N must consider retailing exit - analysts
Analysts are calling on UK brewer Scottish & Newcastle to consider making an exit from licenced retailing if it is to succeed in becoming a pan-European brewer.
A statement from equity analyst WestLB Panmure comes after S&N's investor presentation last week that reiterated the company's desire to become a cross European operation.
But while S&N talked about "motive means and opportunity" in realising its goal, WestLB said: "Although we believe that the presentation reads like a detective story, we believe that it does not really give any real clus as to how the management will be able to deliver against its hopes."
WestLB said that Danone, following the Kronenbourg deal, had three calls on S&N's capital which could leave the brewer with weak cash interest cover. "To us, this situation means S&N must either have a rights issue and/or finesse an exit from licensed retailing in order to realise its stated ambition of becoming a pan-European brewer.
"However it must do this without creating a hole in earnings or making the group vulnerable."
S&N meanwhile has reconfirmed its support for its pub division which WestLB calls "questionable" because the inclement competitive environment means there will potentially be little reward for investment.
WestLB said: "We find the logic for this continuing vertical integration questionable. Furthermore despite the sale of its under-performing pubs, we believe that the management still has much work to reposition the remaining pubs in growth segments."
Beer: The International Market
Coca-Cola announced last week that it was taking over full control of its US water joint venture, CCDA Waters, buying out its partner, Danone. However, speculation over the poor performance of the CCD...
PepsiCo has denied press reports that it is looking to acquire Groupe Danone....
In a tough market for the home and office delivery segment of the US water market, Danone may have to cut the value of its subsidiary DS Waters, the UK's Financial Times reported today....
Groupe Danone is pulling out of the brewing industry....
Danone has completed another share buyback transaction....
Danone and Yakult have announced a joint venture to sell probiotic products in India. The move marks the first entrance by either company into the Indian market, in which they are aiming to become lea...
Danone has announced plans for a joint venture in India with Japan's Yakult Honsha Co. ...
France's Groupe Danone said on Friday that it had finally reached an agreement with The Coca-Cola Company to amend their existing deal regarding the distribution of retail bottled water products in No...
- Is Diageo approaching its "Et tu, Brute" Moment?
- Diageo Q4 & FY - Preview
- Has Diageo added Beer to its 'Non-Core' List?
- SABMiller, Carlsberg, Heineken: Poland's beer itch
- Diageo, Heineken and NBL in South Africa & Namibia
- NPD: Tomatin Contrast, Cù Bòcan
- Diageo, Heineken end South Africa, Namibia JV
- Diageo hit by SEC investigation in US
- Diageo comm's director latest to leave
- Pernod launches pomegranate whisky drink
- Global gin insights - market data, product innovation and consumer trends research
- Global rum insights - market forecasts, product innovation and consumer trends research
- Global Tequila insights - market forecasts, product innovation and consumer trends research
- Global cachaca insights - market data, product innovation and consumer trends research
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends research