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Moy Park stock market flotation confirmed for 2015
Moy Park shares will be sold on the stock market for the first time next year, owner Marfrig Global Foods has confirmed in results for its third financial quarter (Q3)
The group, which hopes the move will raise cash to reduce its debts, first announced it was exploring the possible initial public offering (IPO) in fourth quarter results for 2013.
Brazil-based Marfrig reported that Moy Park grew net revenue by 10% in the quarter over the prior year period with the domestic business also winning market share.
Several factors lay behind this performance, including lower feed costs for cattle, the consolidation of Marfrigs European beef business creating incremental volumes, and positive currency exchange rates.
Moy Parks volume sales had grown by 2% in the UK and Ireland, according to Marfrig, led by fresh product sales through retailers.
Ready-to-eat and frozen coated products had also driven sales growth in convenience channels.
Phil Carroll, Shore Capital Analyst said: We believe this is a robust performance given the challenges in the UK and Irish food retail market. However, outside its domestic market, there was a modest decline in European volumes reflecting lower promotional activity and fragile consumer confidence in France.
Carroll concluded: In addition to modest sales growth, pre-tax profit at Moy Park rose by 24% in Q3, powered by investment in its Grantham operations, which was boosting production and labour cost efficiency. We also believe lower feed costs have played a role. We expect Moy Park to continue its strong trading momentum in the seasonally stronger Q4 period with the benefit of turkey sales in the run up to Christmas. We also expect margins to continue to benefit from lower grain costs and further cost efficiency in relation to production and labour costs. We should add that we also expect that the business approach to ongoing innovation and high levels of customer service should provide it with an ongoing attractive product offering going forward.
Moy Park grew net revenue from 1.2bn Brazilian Real (£300.4M) in Q3, 2013, to 1.3bn Brazilian Real (£330.5M) in the same period this year and adjusted pre-tax profit from 77.6M Brazilian Real (£19.1M) to 95.9m Brazilian Real (£23.6M)
