With Coucke in his “backyard”, Greenyard takes off a solid thorn
The refinancing risk having been eliminated, thanks in particular to Marc Coucke, Greenyard can now focus entirely on its strategic plan.
Looks like the exit of the tunnel is no longer very far for Greenyard
. The ordeal of the specialist in fresh and frozen fruits and vegetables began in the summer of 2018 with discovery of listeria contamination in a factory in Hungary.
To this were added strong competitive pressure and debt as heavy as a cart of watermelons to the point that the group had to call on a crisis manager to save the furniture. The stock market has been slaughtered dropping from 21 euros in January 2018 to a low of 2.5 euros in August 2019.
The action flies away
Today, Greenyard announced an agreement with its banks for a total of 467.5 million euros in funding over three years. The icing on the cake: via its investment company Alychlo, Marc Coucke will take 13.4% of the capital by subscribing to new shares as part of an organized private placement at the unit price of 7 euros. The Coucke effect was immediate, the title ignited this morning at 8.8 euros (+ 18%).
“With the risk of refinancing removed, the company can now fully focus on the implementation of its strategy.”
The new capital structure, including the injection of 50 million euros, will help improve the financial profile and confidence in the group, underline Alan vandenberghe and Guy Sips of KBC Securities.
“With a refinancing risk removed, the company can now fully focus on the implementation of its strategy,” they say. In this context, analysts believe that Greenyard now deserves to be traded on the stock exchange the same as its competitors, this which means that the discount is no longer necessary. So they have raised their target price to 9.6 euros, against 8.4 euros before. The recommendation remains to “buy”.
Fernand de Boer, of Degroof Petercam (“buy”; 10 euros), notes that a ratio of net debt to ebitda which improves to a multiple of 3 allows the group to enter calmer waters after several years of financial distress. “In addition to turning Greenyard into a more attractive partner, it could also broaden the base of potential shareholders.”
Now that the debt issue is closed, it is high time to focus on the fundamentals of Greenyard believes the analyste. He cites three: one, one highly cash-generating company; two, which operates at the heart of the health trend with its fresh fruits and vegetables; and three, which, through its partnerships and a stronger financial position, has become a much more financially stable company.
He also judges thatvaluation in line with its competitors is now justified.