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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CONSUMER STAPLES
- Tesco 31s flatteners (below) screen cheap here - 29s look well bid in & 31s have moved to recent wides (vs. Carrefour +14bps for 1-notch).
- Earnings 2 weeks ago saw leverage drop to bottom of target range (2.2x vs. 2.3-2.8x target & 2.6x last year) - we don't see rating risk on (controlled) moves within target.
- As we mentioned equity pay-outs are sizeable this year but some of that boost is to net out the expected £1b in total proceeds from closure on bank operations to Barclays. Total equity payouts look around £1.9b vs. guidance for retail FCF of £1.4-1.8b.
- Liquidity (£3.2b cash) isn't a issue & neither is significant supply on refi (<£1b/yr) - most (~80%) of its debt is in lease liabilities (£7.6b).
- It runs a 60% ownership on store properties which are valued at £16.9b - market devaluation was only -£0.3b/-2% last year. It does have a buyback strategy on leased stores.
- No concern for us on mgmt comments in Q&A - affirmed target lev. range and noted low levels beneficial at current rates.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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