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SBD Global/June 5, 2013/FinancePrint All
ManU shares "could be set to perform well" over the next 12 months as the club "ushers in a new era of management," according to Matthew Kanterman of MSN MONEY. ManU "is set to close out its first fiscal year as a publicly traded company in the U.S. on June 13 and should report both its fiscal fourth-quarter and annual results soon after." The company is expected to report a loss of $1.50 per share for the quarter, but profit of $22.94 for the fiscal year. However, earnings "are expected to grow substantially" through the next 12 months as the forecast for fiscal '14 calls for $45.56 per share, nearly double the '13 EPS. There are several catalysts working in favor of the company. First, the EPL "enters a new television rights deal" with BSkyB and BT. The deal, beginning in the '13-14 season, is worth $4.7B. Another key catalyst for ManU "in the coming year is the chance of a new, more lucrative merchandising deal." As analysts at Deutsche Bank wrote two weeks ago, the company "could see a large increase in merchandising revenue due to Nike needing to renegotiate its kit supplier deal by July 31." Deutsche Bank has a "buy" rating and $21 price target on the stock. A third catalyst the company has working in its favor is the continued reduction of its debt service costs (MSN MONEY, 6/3).
Surfwear company Billabong "saw half its value wiped out after the company announced an end to long-running takeover talks," according to Josephine Moulds of the London GUARDIAN. The Australian group said two private equity firms, Altamont Capital and Sycamore, had "abandoned plans for a full takeover and were now looking at a deal designed to help pay back its debt." The shares "took a nosedive after they resumed trading on Tuesday," plunging 41% to A$0.26 ($0.25) -- leaving the company worth just A$130M. Sycamore -- which had teamed up with the former head of Billabong's U.S. business -- offered A$0.60 per share, or A$287M, for the company in April. Reports suggest "the firm walked away after its banks asked for more information on the quality of Billabong's earnings" (GUARDIAN, 6/4). BLOOMBERG's Angus Whitley reported after raising capital, selling assets and rejecting at least two takeover bids in less than two years, Billabong on Tuesday cut its earnings forecast again and said that "it may sell Canadian retail chain West 49 to repay debt." Nomura Holdings Inc. analyst Nick Berry: "Raising capital is going to be difficult. The fact that they are flagging asset sales shows the difficulty they are under" (BLOOMBERG, 6/4).
LOOKING TO REFINANCE: REUTERS' Jane Wardell reported IG markets strategist Evan Lucas said, "This is the worst fear that we had. They are now in the situation where they are going to have to be completely refinancing; that will obviously dilute their share price and dilute any form of debt that they've already got, which is the concern they've had the entire time." Billabong said that "weaker trading in Australia and higher-than-expected start-up losses in its Surfstitch Europe business" meant earnings before interest, tax, depreciation and amortization would be A$67M-A$74M. It was the third time since December that Billabong "had downgraded its earnings outlook from an August forecast" of A$100M to A$110M (REUTERS, 6/3). In N.Y., Kelly & Tan wrote Timberland brand owner VF Corp., which was part of the Altamont bid group, "isn't involved in any talks on refinancing, but will still consider buying individual brands from Billabong." All the company's brands "are for sale," and new Billabong shares will not be issued if either of the two refinancing proposals is accepted (WALL STREET JOURNAL, 6/4).
A Nike Cambodian supplier said that "most workers at its factory returned to work" Tuesday after property was damaged during protests Monday, according to BLOOMBERG. Taiwanese-owned Sabrina Garment Manufacturing Company spokesperson Geoff Bilbrough said that 3,500 employees, about 70% of the total workforce, attended work "as usual" on Tuesday. The protests began May 21 when workers demanded higher pay. Nike spokesperson Mary Remuzzi said that "the company does not have anything to add beyond a statement issued last week." That statement said, "It is our understanding that this factory raised its own minimum wage on May 1 and pays above the country’s minimum wage." Nike also said in the statement that "the workers were given additional monthly allowances for housing, transportation and food as well as an attendance bonus" (BLOOMBERG, 6/4).
Bundesliga club Eintracht Frankfurt "will receive a bonus payment from its new shirt sponsor FIAT because the team qualified for the UEFA Europa League," according to SPOX. FIAT, which will replace brewery Krombacher as the club's shirt sponsor with the start of the '13-14 season, will pay Frankfurt €800,000 ($1.05M) for qualifying for the European competition. The payment is a bonus on top of the €6M ($7.8M) deal with the car manufacturer. Club Finance Chair Axel Hellmann said, "Yes, it's true we have earned a bonus" (SPOX, 6/4).