A sunny spring shines a glowing light on this drinks company's new chief
These all feel like positive steps for a company whose share price is no higher than it was 16 years ago. In the meantime, the balance sheet offers some downside protection and also the prospect for further progress. Net debt, adjusting for leases and a pension surplus, stands at €180m and a recent extension of banking facilities to 2030 means the management team has time on its side when it comes to effecting a turnaround in the company's fortunes. Free cash flow can serve to reduce those borrowings, and also fund cash returns to shareholders.
C&C increased its dividend by 5pc in the year just ended and also bought back €30m in stock, in keeping with the plan to return €150m in cash to shareholders across the financial years to February 2025, 2026 and 2027. That sum equates to a fifth of the current stock market capitalisation, using the exchange rate of €1.1934 to the pound that prevails at the time of writing.
Questor says: buy
Ticker: CCR
Share price: 162.8p
Update: Indivior
Such is the wild trajectory of the share price of Indivior since its demerger from the former Reckitt Benckiser 11 years ago that some investors may be relieved to see it cancel its secondary listing and withdraw from the London market. Others may feel the lowly valuation merits patient support even when the stock can only be traded on Nasdaq.
Sceptics will chunter about a history of litigation and profit warning, including three of the latter in 2024. Supporters will put forward Indivior's role as a developer of key treatments for substance abuse disorders, especially in the area of opioid dependency, and how 2024 saw the firm generate its highest levels of sales since 2014's spin-off and its best profits since 2017. Competition and how Presidential policy could affect Medicaid funding will be challenges and sources of further debate.
Both sides of the argument will then have to chew over the valuation. The shares stand well below their 2018 record highs of around £24. As a result, even after the final trading alert, which warned of lower sales in 2025 thanks to fall in revenues from Suboxone for which sales from Sublocade would not fully compensate, analysts' forecasts put the stock on a forward price-to-earnings ratio of less than nine times for 2025 and less than eight times for 2026. If Sublocade can still reach Indivior's medium-term target of $1.5bn, compared to the $756m recorded in 2024, then profits could motor and render the shares cheaper still.
Where the shares are listed will make no difference to this at all; new chief executive Joe Ciaffoni and new chair Dr. David Wheaton must get the company to deliver on its targets.
There is enough value here to persuade long-time holders to cling on.
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