(Finance) – ValueTrack lowered to 3.86 euros per share (from 4.87 euros) the fair value on Caribbean Company, a company listed on Euronext Growth Milan and active in the import, development, brand building and distribution of premium and ultra-premium spirits, wines and soft drinks. Analysts write that the data for the first half of 2023 were “disappointing“, with growth negatively impacted by sluggish market demand (high inflation, unfavorable y/y statistical comparison), adverse weather conditions and changes in distribution strategy.
As the company was structured to accommodate greater growth, i fixed costs have had a strong impact on profitability: EBITDA stood at breakeven, EBIT at -0.7 million euros and net profit at -1.6 million euros (compared to 2.2 million in 1H22). Net debt stood at 3.7 million euros (1.9 million euros at the end of 2022).
Analysts also point out that in the months of June and July the company suffered a computer fraud (clone phishing attack), which caused cash damages of approximately 0.88 million euros. “This is obviously one bad news both for the impact in terms of cash and for the image of the company”, we read in the research.
In this scenario, and assuming a renewal of the distribution agreement with Brown Forman beyond 2024 (current expiry set at the end of 2024), ValueTrack has lowered the forecast top line 2023-25 averaged 16%, with a more than proportional impact on EBITDA-EBIT-net profit. It now forecasts: Value of production at €79 million in 2025, or 17% CAGR22-25; EBITDA at 6.2 million euros in 2025, with EBITDA margin at 7.8% (-160 bps vs. 2022); net debt at 8.6-13.5-13.8 million euros in 2023-24-25.
(Photo: Towfiqu barbhuiya on Unsplash)